JP Morgan internal report predicts 40,000 City job losses

by Gill Montia

Story link: JP Morgan internal report predicts 40,000 City job losses

What is now widely recognised as a global financial crisis unlike any other, could cost up to 40,000 jobs in London’s financial services sector during 2008 and 2009.

Investment bank, JP Morgan, is predicting that the fall out from the credit crisis could mean that one in 10 of the capitals financial sector jobs will go.

The figure is double December estimates of 20,000 and puts predictions for City job losses made at the onset of the credit crisis in the shade.

Last year, International Financial Services London, the private sector organisation that promotes the international activities of UK-based financial services, said that the City’s headcount was likely to be down 10,000 in 2008.

A cull on the scale forecast by JP Morgan would equate to 5% of jobs in the capital’s financial industry and while in percentage terms this is behind the 7% of the dotcom crash in 2000/01, the sector has been growing fast in the past eight years.

Staff in debt securitisation, private equity, and other investment banking operations are likely to be hard hit.

JP Morgan’s estimate of job losses appeared in an internal report, which the bank has pointed out was not intended for publication.

This has led to speculation that the prediction is a sound indicator of just how bad City insiders expect the credit crisis to become.