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Hopes and Fears: Hires and Fires in Europe’s Financial Sector


The new year may not have started the way we hoped.

As predicted, Europe is experiencing its second wave of COVID disruption during the midwinter period. Whilst many of us work from home, in sight, however, is the light at the end of the tunnel. With the availability of a vaccine and the memory of how to manage a lockdown, the economy has not taken as much of a hit as it did last March.

Indeed, when it comes to financial employment in Europe, 2021 does offer something better than the prior year.

Research from HR consultancy firm Robert Half found that 78% of UK business leaders surveyed are “somewhat-to-very confident” about their growth prospects going into the first half of 2021. This rate is mirrored by France and closely followed by Germany (72%) and Belgium (69%).

Across business as a whole, 23% of those in the UK are expanding, which is higher than the continental average of 17%. Within this, financial services makes up the fourth-highest industry driving demand for talent, above even IT services.

Changing directions on the Continent

Unfortunately, Frankfurt’s banking hub will be suffering from the effects of Covid-19 for a long time. Helaba Bank released a study in November predicting 2,000 job losses by 2022, creating a 3% employment reduction from before the pandemic’s initial outbreak.

Photo: / Frankfurt

Despite working to keep job cuts as minimal as possible, big banks including Deutsche Bank and Commerzbank have announced that they will be cutting 28,000 jobs globally over the next few years.

The pandemic also changes the plans for Brexit – banks in Germany were hoping to attract 10,000 financiers from London to their market but will have to cut these jobs down to only 3,500.

When the referendum was first decided, Japanese bankers landed on Frankfurt as a post-Brexit EU base, but the lack of job availability may lead to changes in these plans. The obvious headline for London heading into 2021 was that of its departure from the European Union and the UK’s subsequent loss of international competitiveness.

Many jobs have already and will continue to move to continental Europe, but some will stay simply by virtue of the fact that London has Europe’s most developed financial services infrastructure.

London has seen a movement of jobs to the other side of the English Channel, but it is easy to get carried away and predict the end of British financial services as we know it. UBS, JP Morgan, and Bank of America all increased their EU27 headcounts since the Brexit vote in 2016.

Source: FT

However, JP Morgan has not yet cut jobs in London, and Deutsche Bank’s original prediction that they will move 4,000 jobs from London, has recently been downsized closer to the 400 mark. And, as if defiant to the economic forces that be, Goldman Sachs and BNP Paribas have actually increased their London headcounts.

Europe going forwards

The British finance sector ended last year with 13.7% fewer opportunities overall since 2019, but with a 23.6% monthly increase, demonstrating a recovery from the initial coronavirus shock.

Part of this may be due to the fact that the UK is slowly starting to ease out of the furlough scheme, leaving companies able to enact their original 2020 hiring plans. However, it is unclear how long this trend will last, since the furlough scheme has been extended until April.

There is still uncertainty in Europe. HSBC seems keen to move jobs from Europe to Asia, but we won’t know specifics until its fourth quarter review is published next month.

The bank has previously said it will reduce its headcount by 35,000 across Europe and North America. If HSBC follows other groups like Deutsche Bank, their initial gloomy prediction may be firmly reeled in.

For those applying, it is a mixed story. Jobs are certain to move around over the next couple of years, but how much is unclear (albeit probably to a lesser extent than initially predicted).

As we continue through 2021, at least, recruitment will continue to rise across the board as Europe recovers from the initial shock of COVID-19 last March.

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