Redundancies have been announced by five of the largest employers in financial services. This contradicts predictions that the financial services industry is on the brink of recovery.
Powerchex, a technology staffing business, commented, “We have not seen the end of this recession yet, and the repercussions to the opportunities [for IT staff] may end up being much more severe than what we see now”. They are predicting that contracted IT workers will soon see a reduction in their pay, alongside a reduction in the work which is available to them. Managing Director of Parity resources, Alan Rommel commented, “Rates are being cut everywhere. This is especially true in financial services.” A top financial institution said that IT contractors had been asked to take a 10% pay cut which was not met with any opposition prompting them to wish they had suggested 20%. The marketplace is also now saturated with IT contractors looking for work with far fewer contracts to fill.
ABN Amro is merging with Fortis, and as a result of this 6,500 staff are to be made redundant as a cost cutting exercise. Credit card company, American Express have announced job cuts of 4,000 due to the “economic outlook”. Part-nationalised banking group Lloyds is planning to create 300 jobs to reduce their job cuts to 325 posts but this has not satisfied unions. They are accused of making decisions in the short term without taking account of future business needs. This is also the case with insurance company Legal & General who are cutting 560 jobs across their three processing centres. At Barclays 350 full-time IT workers are being made redundant.
According to Powerchex, the resulting effect on the market is that, “companies are looking to the market for better quality candidates to replace permanent senior IT posts. The reality is that [financial] firms are only taking on new people if they have a new project, and at the same time, they are [looking at] keeping their existing contractors [for] longer.”