Guardian UK: 10,000 face axe as City (London's financial district) panic spreads

[marmar]

10,000 face axe as City panic spreads
Richard Wachman, City editor and Lisa Bachelor The Observer, Sunday March 16 2008


Banks are to swing the axe in the City with 10,000 jobs expected to disappear this year amid signs of growing financial turmoil and fears that the US is already in recession. The forecast comes from the Centre for Economic and Business Research (CEBR), which estimated that redundancies would top 6,500 by October, but now expects to revise that number sharply upwards when it publishes new data early next month.

Several thousand have already lost their jobs at Citigroup, Morgan Stanley, Goldman Sachs, Deutsche Bank and Merrill Lynch following the shutdown of debt markets, the run on Northern Rock, the collapse of hedge funds and the implosion of several private equity deals in the wake of the worst liquidity squeeze since the 1970s.

Doug McWilliams, head of CEBR, said that banks, insurers, hedge funds, financial recruitment firms and venture capitalists were shedding staff 'at a faster rate than we expected at the end of last year, and will continue to do so'. But he says job cuts will still come in below the 40,000 axed in the recession of 1991-02 and the 20,000 shed during the dotcom and technology crash of 2000-02.

The extent of the panic in financial markets was underlined on Friday when the US Federal Reserve was forced to use a 1930s Depression-era procedure to bail out Bear Stearns, the seventh-largest US investment bank, after hedge fund clients and other investors withdrew funds, leaving it on the brink of insolvency.

Fears for the US economy, which has been slammed by a worsening housing slump, saw the dollar crash to a record low last week against the euro and its worst level against the Japanese yen for 13 years. Stock markets fell around the world, with investors seeking a safe haven in gold, which hit $1,000 an ounce for the first time, and oil, which hit $110 a barrel. President George Bush will meet Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke tomorrow to discuss the crisis. ......(more)

The complete piece is at: http://www.guardian.co.uk/business/2008/mar/16/marketturmoil.creditcrunch

[mrmx9]

1. Only 10,000? - I think it will probably be more than that!

[HamdenRice]

3. The article is referring only to the "City of London" which weirdly isn't London

The "City of London" refers to a tiny part of London where the banks and financial institutions and law firms that service them are. It's the equivalent in New York to "Wall Street."

So the article is saying that there will be 10,000 layoffs in the several block radius that constitutes the financial district.

I'm sure that the recession will lead to more layoffs on other parts of London.

[acmavm]

2. bush** & Co. took the British down the old poop chute right along with

the USA. And the British government still supports the guy.

Why?