Banking sector faces 'mass job cuts'

25 June 2008

Around 175,000 positions could be lost due to the credit crunch at financial firms across the world, new figures from a recruiting firm show.

According to Gerson Group, the total cutbacks will far exceed the 83,000 jobs lost so far in the sector following the beginning of the global financial crisis last summer.

It is also likely that these job reductions will exceed those experienced in large banks following the bursting of the dotcom bubble in 2000-03, Bloomberg reports.

Russ Gerson at the Gerson Group commented: "We are going to have a major contraction. This is affecting all areas of the investment banking universe and it's affecting all areas globally.

"The worst is yet to come."

Gary Goldstein at rival New York recruiters Whitney Group added that the sheer scale of the cutbacks might prove to be detrimental to the banking industry in the long term.

"[Banks] just keep chopping heads…they'll wake up one day and realize that they've cut too deep and now these businesses have come back and they don't have anybody to do them," he said.

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