Firms may need to cut more staff

Axe In Wood

Rarely has an industry lost so many jobs with such little effect.

Bloomberg News reports that HSBC has frozen hiring and pay; Barclays plans to cut 1,200 investment banking jobs; and Deutsche Bank will cut bonuses after posting a stinging loss for 2015.

It's already been a grim year for bankers' jobs. But it's not been the only one. In all, half a million jobs have been eliminated across the industry since the global financial crisis of 2008, according to Bloomberg News.

And it's likely to get worse in Europe this year as revenue stagnates. UBS yesterday reported a slump in investment banking revenue during the fourth quarter.

Despite the wave of firings, costs at investment banks remain stubbornly high - both in absolute terms and as a proportion of revenue. The cost-income ratio at UBS's investment bank is still 93%, the company said on Tuesday.

European firms were slower than their U.S. counterparts to eliminate jobs. Pay experts say average compensation per head has changed little over the past five years, largely because investment banks kept faith in an eventual rebound that would reward those that had kept experienced staff.

To access the complete Bloomberg News article hit the link below:

Europe's Banks Need More Cuts

UBS's Miserable Quarter

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