City job losses mount

by Gill Montia

Story link: City job losses mount

Earlier this week, investment bank JP Morgan predicted that the credit crisis could result in 40,000 job losses in London’s financial services sector, during 2008 and 2009.

Yesterday Merrill Lynch announced a 4,000 headcount reduction worldwide, giving rise to estimates that 400 jobs could go at the brokerage’s offices in the capital.

Citigroup is expected to writedown $11 billion of losses for the first quarter of 2008, and has embarked on a cost-based review that will inevitably impact on London jobs; up to 1,000 City jobs could go.

The results expected from the bank today will increase its credit crunch-related writedowns to $29 billion for the past three quarters.

Meanwhile, Swiss investment bank, UBS, will be cutting around 900 jobs from its Liverpool Street headquarters, by June.

The JP Morgan estimate of 40,000 job losses translates as over one in ten of the capital’s financial services workforce.

It is double earlier estimates and presents a horrifying prospect for City workers and politicians alike.

Much depends on the Treasury’s latest rescue plan, which could see the Bank of England provide £40 billion to lenders, to ease the credit crisis.

EDITORS NOTE: 7pm I’ve just received an email from JP Morgan media relations, indicating that the story is “inaccurate”.

It’s been a long day, there’s been a lot to deal with, and while I’m happy to make actual corrections to actual misreporting when politely contacted, I make exception to receiving terse emails whose labelled “inaccuracies” are little more than nit-picking.

For context, I’ll paste my reply below and allow readers to be the judge as to whether I’ve mis-interpreted this:

Thanks for the email – checking on the pointers you raise, it does read like nick-picking in the extreme.

1. “This was not an ‘internal note’ at all”

If the report was not published as a press release document for consumption outside of the company, then it was intended for internal consumption within the company. Whether this is labelled “weekly piece” or not does not distract from the fact it was not part of a general release targeted for direct media consumption.

2. “It is also incorrect that the 40,000 number refers to those in ‘Financial services’, the 40,000 refers to across the city, not just financial services”

Again, this is splitting hairs – the report may have intended to highlight losses “across the city” but it’s plainly obvious we are talking about those either directly or indirectly associated with financial services, or impacted as a direct result of events within financial services.

3. “It is also not a ‘prediction’, it is not JPMorgan’s economist forecasting job cuts, it is a property team using enecdotal evidence and extraopolating numbers from office vacancy and rental growth assumptions.”

Well, if this doesn’t refer to a “prediction” then please ensure you have plain reference to your economists being registered clairvoyants, if you are going to be so nit-picking about what constitutes a dictionary term of “prediction”.

4. “this is certainly not the ‘one in 10′ calculation that article refers to”

I’ll be happy to amend this after the London Stock Exchange and other publications modify their own reporting, which I can only presume is not based solely on that published by Banking Times.

Whilst you may attempt to insist the above points are “inaccuries”, the actual reading is closer to that of yet another press officer engaged in damage limitation first, and frankly I have no time for it.

Overall, your email reads as terse and nit-picky, and you invite nothing but the same in response.

- Brian, executive editor, Banking Times.

Feel free to comment below, one way or the other.