Stephen Gandel reported on Fortune.com that before Brexit there were 40,000-jobs at risk.
Financial Services firms have already started re-locating jobs (mainly euroclear) to Dublin as part of their post Brexit plans. BUT despite the early fears no head office functions have moved.
What the Banks have been saying…
Martin Arnold and Laura Noonan reported in the London FT, that Jamie Dimon, JPMorgan chief executive, warned that 4,000 jobs of its 16,000 in the UK could be moved out of the UK. CEO Jamie Dimon lowered that figure, saying the bank is likely to take at least 1,000 jobs out of London, though the bank is committed to keeping a large staff in the city”. Daniel Pinto — whose IB unit employs most of the 6,000 staff in Britain — also said he hoped to keep most of its UK investment bank intact. The bank would “need to figure out a way to deal with” some specific products and services, such as global custody and corporate deposits, but he said any moves would be gradual.
It has been reported pre Brexit that Morgan Stanley may relocate as many as 2000. There’s speculation in the press around this figure.
The Financial Times reported HSBC have reiterated that it would “keep its headquarters in the city, a decision that the bank arrived at after a 10-month review ending in February.” However whilst HQ will stay put it seems some roles would be affected…. Amber Choudhury at Bloomberg reported “Stuart Gulliver of HSBC Holdings Plc has said the lender would likely need to move 1,000 investment bankers to Paris because they’re linked to operations governed by MiFID II”
The BBC quoted Barclays CEO Jes Staley as saying that the bank is “staying anchored in Great Britain.”
Financial Services firms have been downsizing before Brexit. Cutting jobs and Offshoring jobs to Asia, Africa and Eastern Europe. Only last year Deutsche CEO John Cryan reported in the FT that he would withdraw from 10 countries and cut 9,000 jobs as part of an overhaul designed to restore profits….Lloyds boss Antonio Horta-Osorio has moved 7300 jobs and has another 1800 to go.
Relocating jobs – whats the impact on Audit?
Off to sunny Madrid?…
Auditors who think a move to Madrid, Dublin or Frankfurt (for the record, some passporting and trading licences are already in place in Frankfurt at some banks), could be disappointed as salaries will align to the local market. So a senior VP on a £120k salary is not likely to attract anything near that elsewhere in Europe, but then the cost of living and other outgoings are lower.
Some reports have gone as far to say VP’s should expect to lose as much as half of their salary if their role is relocated. However I don’t see this analysis applying to the Senior Auditor as it doesn’t take into account the premium required to attract those with the rare skills and knowledge of complex markets that the UK FS Auditor possesses. Infact Audit, Legal, Controls & Risk staff could be in high demand to help manage change during Brexit.
Research from consultancy Synechron concludes that it costs an average of £50k per employee in relocation costs to move employees to either Amsterdam, Frankfurt, Paris or Dublin.
Relocating roles doesn’t present the cost saving you might expect, certainly in the short term.
One senior individual I spoke to is not expecting to relocate but has seen an increase in travel to local branches and an increase in regional hiring within overseas offices at junior levels. He expects “no significant changes until there is more clarity around passporting” [see – Brexit internal audit job market within financial]. Furthermore, “a limited amount of roles around operations and functions are expected to move ” but this is just another symptom of the cost savings that banks have been going through. Brexit is just one more difficulty to deal with as [my employer] seeks to save costs by offshoring. Change always creates work for governance and controls. It’s just more of the same with Brexit”.