Worried About Your Wall Street Job? At Least You're Not In Europe

Thought the banking job situation in the U.S. was dire? Well it pales in comparison to what's happening in Europe right now, where the old continent is in the midst of nothing short of a banking bloodbath.

UBS's decision to slash 3,500 jobs, or 5 percent of its workforce, brings to more than 40,000 the number of jobs cut from European banks in the last month.

Less than a couple of months ago, reports suggested that the job situation in the UK was looking decidedly rosier than in the U.S. [ See my earlier blog post, 'Worried About Your Wall Street Job? Move To London] . But a couple of months for banks are almost like dog years. Anything can happen. At the very least, bad situations often precipitate a lot faster than people -- even top analysts --- predict.

According to Bloomberg, E.U. banks are now shedding jobs six times faster than their U.S. colleagues, as concerns about the creditworthiness of Italy, Spain and France spiral and rock financial markets. A huge proportion of the job cuts are taking place in the UK.

UBS's announcement that it was getting rid of thousands of employees comes fast on the heels of HSBC's decision on August 1 to pink-slip 30,000 employees, Barclays' recent announcement that it is slashing headcount by 3,000 and RBS's decision to lay off 2,000 employees.

In fact, European banks are laying off employees at the fastest rate since the collapse of Lehman Brothers Holdings Inc. in 2008. Bloomberg reports that EU banks have cut about 67,000 jobs so far this year. U.S. banks announced about 10,500 cuts in the same period.

And while industry folk generally talk about banking cuts being cyclical, these cuts are likely to be permanent, Bloomberg reports.

From Bloomberg:

"Returns will continue to fall and costs on revenue have just exploded," Stephane Rambosson, managing partner at executive search firm Veni Partners in London, said. "Somehow banks have to make the equation work. In the long term, there will be far fewer bankers than there were."

Banks will be forced to continue to cut costs as they struggle to increase revenue amid tougher regulation, according to an Aug. 17 report by KPMG LLP.

"We're looking at a fundamental restructuring of banking," said David Sayer, global head of retail banking at KPMG in London. "Banks have to hold far more capital and more of it in liquidity, which doesn't generate a return. This means the cost of doing business is higher, leading banks to think about where they'll make money and pulling out of countries and areas where they won't."