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Monday, 13 August, 2001, 05:01 GMT 06:01 UK
Slump 'has cost 25,000 bank jobs'
Investment banker graphic
More than 25,000 investment bankers have lost their jobs this year, as the global economic slowdown has hit revenues, a survey said.

A slump in company takeovers and mergers has left investment banks without work to support corporate financiers, who advise on these deals.

The number of mergers and acquisitions in July was, in Europe, 34% below the monthly average for last year, and, in the US, 54% lower.

And the slump was reflected in share markets and bond launches, leaving banks with excess traders and brokers.

Stealth tactics

The Financial Times estimated that 25,430 financiers, mainly in the US and UK, had lost their jobs this year, a figure which, because of a more subtle approach being taken by banks towards redundancies, is probably an underestimate.

"Banks have been eliminating positions through stealth instead of announcing sweeping reductions," the FT reported.

And the newspaper warned that more cuts were likely to follow, with banks including Schroder Salomon Smith Barney, JP Morgan Chase and CSFB among institutions said to be bracing themselves for cuts.

"Bankers say they will be forced to get much more aggressive if there is no improvement in business this autumn," the report said.

"So far there are few signs that such an upturn will take place."

Merger effects

Not all the redundancies can be blamed on the downturn in volumes, with losses during cost-cutting drives following mergers, such as the tie-up between JP Morgan and Chase, also responsible.

"But in general the losses reflect the severe downturn in capital market activities that has followed the fall in stock prices for technology and telecommunications companies," the paper said.

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 ON THIS STORY
BBC World Business Report's Louise Greenwood
"The true level of job losses could be much higher"
See also:

03 Aug 01 | Business
US unemployment remains steady
18 Jul 01 | Business
UK jobless total falls again
12 Apr 01 | Business
City fights redundancy fears
01 Apr 01 | Business
20,000 City jobs to go
14 Mar 01 | Business
The changing face of UK jobs
30 Jan 01 | Business
ING Barings axe falls on London
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