The votes were cast and counted, and for better or worse the UK is now splitting from the European Union, which will impact financial markets worldwide. However, as market participants and analysts look to other assets, instruments, and the future of the EU itself, one has to wonder whether the ‘Leave’ victory will accelerate the massive ebb of jobs leaving the UK at global lenders.
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Even before the vote and as far back as last year, lenders such as Deutsche Bank, Standard Chartered, and Barclays were embarking on widespread cost cutting plans that called for the gutting of their UK workforces. While some lenders painted in broad strokes, i.e. Deutsche Bank’s systematic bloodletting of upwards of 35,000 employees, other banks such as Standard Chartered led a more targeted approach, heralding a focused retail strategy.
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Regardless of the differences in strategies, the run up to the Brexit referendum has been crystal clear – jobs at lenders and trading desks have been experiencing a mass exodus in the UK. Even before Brexit talks heated up, the primary culprit was profitability, which for resulted in bids to placate increasingly nervous shareholders.
Last One to Leave Turn Out the Lights
Fast-forward to this morning and Britons are still processing the results of last night, which over the course of the voting oscillated back and forth. At one point, the ‘Remain’ camp looked to be firmly in control, which led to a subsequent and final push from proponents of an EU divorce. Early signs were already seen across UK markets, and specifically across banking stocks.
Barclays, Lloyds, and RBS were all hammered at the open, which given the precarious state of their business already in the UK, cannot be seen as anything but a destabilizing force for personnel in the country. Moreover, the loss of the UK’s European symbiosis could also trigger an outflow of even more positions as banks and operations must grapple a duality of business within and outside of the EU itself.
Within the UK orbit however lies what for many has become a stark reality – a now insulated microcosm of high labor cost roles that are bogging down revenues, in turn causing a whiplash from shareholders. Expect the job cuts to continue into H2.