The pace of job losses across the economy showed no signs of easing today as
Barclays announced it would shed more than 2,000 jobs in the City.
The news followed reports that jobs would also be lost at
Merrill Lynch and that Bank of America would shed around 1,900 British staff. Bank of America bought Merrill at the height of the
banking turmoil last autumn and wants to cut costs.
Barclays, one of the few banks to shun the government's bank recapitalisation scheme, aims to cut around 7% of its workforce. The bulk of the job losses will be at the bank's investment banking division, Barclays Capital, run by Bob Diamond whose personal earnings regularly top £20m.
A spokesman for the firm said: "We can confirm that we have begun a consultation process to reduce headcount across some parts of IBIM [Investment Banking and Investment Management] to ensure that we are appropriately sized given the current market conditions."
He said the job cuts would be global and figures for UK redundancies were unavailable. But he added that Barclays' retail arm, which includes commercial banking and Barclaycard, would not be affected by the cuts. "We will continue to hire selectively across those parts of the business that are growing," he said.
About 500 jobs will reportedly go at the bank's wealth management division and some at its Barclays Global Investors business. The jobs are premium ones and their loss is likely to have knock-on effects on spending in London and the home counties.
The cuts come on top of 3,500 late last year following the acquisition of parts of the US operations of the collapsed US investment bank
Lehman Brothers.
The City directly employs about a third of a million people and job losses are estimated to be heading for the tens of thousands this year as the Square Mile bears the brunt of the losses resulting from the
credit crunch, now nearly 18 months old.
House prices are now said to be falling faster in London than in other parts of the country as a result of the damage done to the City and unemployment in the capital is rising fast.
Across the wider economy more than 50,000 job losses have been announced since Christmas and 27,000 Woolworths employees joined the dole queues last week.
Upmarket cooker maker Aga added 400 to that total yesterday and building materials group SIG laid more people off.
Unemployment on the broadest measure rose by about 250,000 last year to just under 1.9 million at the end of October. The Bank of England monetary policy committee's labour market expert, David Blanchflower, has estimated that the total will have risen to 2 million by December and 3 million by the end of 2009.
The damage is now affecting all parts of the economy. Shares in the Real Hotel Group were suspended today amid uncertainty over its financial position. The group, which operates 40 hotels in the UK, made the request a day after revealing sales had slumped by a third in the first seven days of this month.
Real Hotel runs its own brands, Purplehotels and Stop Inns, as well as Comfort Inn, Quality and Clarion hotels which are licensed from Choice Hotels International, and the New Connaught Rooms in London.
On Sunday, earth moving equipment group JCB announced 700 job cuts and retailer Land of Leather said 850 jobs were under threat. Marks & Spencer last week announced 1,200 job cuts while Waterford Wedgwood has called in the administrators, putting 2,300 under threat.
This week began with an awful set of economic surveys from the British Chambers of Commerce, British Retail Consortium and Royal Institution of Chartered Surveyors, all of which showed record lows and suggested the economy had entered a violent downward spiral.
Retailers are suffering as consumers cut their spending in the face of rising unemployment, the housing market is still in freefall because of the lack of mortgage availability and industry is suffering from collapsing markets abroad and at home.
