Job losses in the City reached the highest level since the peak of the financial crisis in 2008, data obtained by Pinsent Masons has revealed.
The data, sourced from the Financial Services Authority (FSA) through a freedom of information request, found that a total of 1,373 financial services employees were suspended or dismissed in 2012 – representing a 76 per cent increase on the year before.
The firm’s financial services partner, Helen Farr, said that the figures reflect the impact FSA enforcements have had on financial firms following reputational damage associated with rogue traders such as Kweku Adoboli, the former UBS banker jailed for losing the bank billions of pounds in fraudulent trades.
“Financial services firms are operating under increased scrutiny and as a result employers are imposing industry rules more strictly,” she said in a statement. “FSA enforcement activity has clearly had an impact on firms’ willingness to tolerate wrongdoing. Firms now appear much more likely to discipline employees for offences.”
According to the firm an additional 36,868 people in the financial services sector lost their jobs through redundancies last year, bringing the total number of people to have left their posts in the past five years to 177,697.
“The total number of job losses in the sector is striking,” Farr said. “While it should be kept in mind that many of these people may have been re-employed and some will have simply transferred internally, the numbers certainly tell a story.”
“It will be interesting to see the impact that further reforms around ring fencing or formal separation of business divisions, as foreseen by the Vickers and Liikanen Reports, will have on the banking sector.”
The firm itself made a number of redundancies as a result of its merger with Scottish firm McGrigors in May last year. It cut 47 jobs among its business development, IT, HR and facilities staff in the summer (24 August 2012) before axing a further 15 jobs in December 2012 (7 December 2012).