Within investment banking there is one clear area in which 2012 will be a challenge; there will definitely be reductions in the number of front office IT roles in the City. It’s true that the back office support departments will also likely to be hit again, but with them having taken the brunt of cuts in previous years they have been slow to regrow and thus there is little fat to trim and in some cases subject to near shoring into regions like Scotland. This means that it is likely to be the front office that is affected the most during 2012. The pace of job cuts in this area already at present is fast approaching 2008 levels and could go well beyond during next year.
The Eurozone crisis is still the major factor affecting banks and the fact that regulators are focusing on the most lucrative activities means staff costs are unsustainable. With the key drivers on IT projects for many banks being to simply spend money to keep things going and lower transactional costs the demand for new talent into the front office is likely to be at very low levels.
Certainly from what we are hearing from our clients, these losses and hiring freezes will be across the whole front office, not isolated to pockets.
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