Financial services sector expects cut jobs

Financial services sector expects cut jobs

The financial services industry has returned to growth in profitability after a tough summer in 2004, but further job cuts are expected.

Link: Financial services the most tech-savvy sector

According to a quarterly snapshot of the industry conducted by the CBI with PricewaterhouseCoopers, the sector has not returned to the performance heights seen earlier in 2004, and banks, insurance companies and fund managers are still feeling the pinch.

The survey found that the return to growth was achieved through tough cost control, and companies are insisting that they still have to go further. As a result, over the next three months they expect to shed jobs at the fastest rate for two years.

Life insurers and banks expect to make the most cuts, but finance houses and building societies mercifully hope to create jobs.

John Hitchins, UK banking leader at PricewaterhouseCoopers, said: ‘The strong performance experienced by financial services firms in the first half of 2004 is unlikely to be repeated at the beginning of 2005 as only modest volume growth is predicted to continue. Sectors with significant personal lending businesses had the most pessimistic outlook.

‘The recent reduction in headcount is expected to intensify in the banking, fund management and insurance sectors and all sectors expressed concerns about the level of demand affecting growth this year.’

And Ian McCafferty, CBI chief economic adviser, said: ‘Like other sectors of the economy, financial services picked-up after a poor August and September. With oil prices having slipped back from their peak and interest rates likely to be stable for the time being, some of the headwinds from the wider economy earlier in the year have diminished.

‘This in turn is helping financial services, though only to a limited extent. The sector had a very strong run up to the middle of last year. That isn’t coming back in the immediate future.’

The study found that the sectors most closely linked to the resurgent stock market tended to do best, and that IT was the only area in which companies were expecting to spend more than last year.

Share

Resources & Whitepapers

The importance of UX in accounts payable: Often overlooked, always essential
AP

The importance of UX in accounts payable: Often overlooked, always essentia...

1y Kloo

The importance of UX in accounts payable: Often ov...

Embracing user-friendly AP systems can turn the tide, streamlining workflows, enhancing compliance, and opening doors to early payment discounts. Read...

View article
The power of customisation in accounting systems
Accounting Software

The power of customisation in accounting systems

1y Kloo

The power of customisation in accounting systems

Organisations can enhance their financial operations' efficiency, accuracy, and responsiveness by adopting platforms that offer them self-service cust...

View article
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

4y Accountancy Age

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
8 Key metrics to measure to optimise accounts payable efficiency
AP

8 Key metrics to measure to optimise accounts payable efficiency

1y Kloo

8 Key metrics to measure to optimise accounts paya...

Discover how AP dashboards can transform your business by enhancing efficiency and accuracy in tracking key metrics, as revealed by the latest insight...

View article