Canary Wharf Exodus- Brexit toll on Graduate Jobs

Triggering Article 50 on the 29 of March paved way to a lot of uncertainty. The inability of the EU and U.K to delineate a clear path from Britain’s exit has motivated the senior executives of many investment banks to announce their decision to relocate graduate jobs to financial centres outside the UK, including destinations such as Frankfurt, Brussels and Dublin.

Earlier this year, Deutsche Bank forecasts that it could move up to 4000 jobs from the UK workforce to Frankfurt due to the ambiguity of Britain’s future relationship with the rest of the bloc. The company plans to move about €300bn (£268bn) worth of balance sheet assets outside of London.

BBC News reported that the Bank of England believes that up to 75,000 jobs could be lost from financial services, assuming no specific UK-EU financial services deal will be made…

Unfortunately for students in the UK, Deutsche Bank won’t be the only bank to make this decision. In a recent article posted on the Guardian, JPMorgan is also considering moving up to 1000 staffs to Dublin, Frankfurt and Luxembourg.

Richard Gnodde, head of European operations at Goldman Sachs, commented that more people are needed in Madrid, Milan, Paris and other EU capitals. Standard Chartered told shareholders at its annual meetings in London on Wednesday that it was speaking to regulators in Frankfurt about setting up a new subsidiary in Germany. Meanwhile, Lloyds is planning to set up subsidiary in Brussels and HSBC plans to shift 1000 roles to Paris.

Regardless of the outcome of Brexit, uncertainties over Theresa May’s intentions for a hard or a soft exit are enough for banks to want to avoid the risk preemptively and relocate.

Until negotiations are settled and we can see the palpable effects of the U.K’s exit, it is difficult to predict an exact number of job losses from the finance sector…

Reuters predicts that if the U.K were denied access to Europe’s single market, 10,000 jobs will be shifted outside of Britain or created overseas over the next few years. However, these forecast figures vary enormously across different banks and institutions. Earlier this week, BBC News reported that the Bank of England believes that up to 75,000 jobs could be lost from financial services, assuming no specific UK-EU financial services deal will be made. Brussels-based think tank, Bruegel, predicts 30,000 job losses whilst Xavier Rolet, the chief executive of the London Stock Exchange, pessimistically expects 200,000 jobs to go.

The extent of relocation will ultimately depend on the outcome of Brexit. If the UK manages to settle negotiations that will allow them to maintain close relations and trade with EU countries, then post-Brexit effects on finance jobs relocation won’t be as extreme as we fear. Until negotiations are settled and we can see the palpable effects of the U.K’s exit, it is difficult to predict an exact number of job losses from the finance sector.

With more jobs planning to be created in financial centres such as Frankfurt and Dublin, I think it would be more reasonable that graduates should be seeking for finance jobs in these destinations…

So what does this mean for students in the UK seeking for finance graduate jobs in the City? Should they be worried about the finance career prospects post-Brexit?

As an incoming graduate seeking for a finance job myself, I am not wholly optimistic about job prospects in the finance industry. I would expect investment banks such as JPMorgan and Deutsche Bank to cut down on the number of graduate recruitment in the UK, particularly in London, at least in the next few years.

With more jobs planning to be created in financial centres such as Frankfurt and Dublin, I think it would be more reasonable that graduates should be seeking for finance jobs in these destinations, as opposed to finding one in the capital, to increase their chance of being recruited.

Many businesses will struggle as a result of being unable to adapt to structural changes following Brexit, suggesting a higher demand for financial consultants could be on the horizon to assist in the management and restructuring of businesses…

On the other hand, if you are not looking for a job in banking but rather financial consultancy, the career prospects looks more promising. Unlike investment banks, consulting firms won’t be directly affected by the volatility of financial markets. Uncertainty in the British economy will lead to falling business confidence, therefore a decline in investment which may severely affect the sales and trading sector.

However, fortunately for consultants, we are unlikely to see an impending job cut in the consulting sector or consulting firms relocating overseas in near future. On the contrary, many businesses will struggle as a result of being unable to adapt to structural changes following Brexit, suggesting a higher demand for financial consultants could be on the horizon to assist in the management and restructuring of businesses. As a matter of fact, the Big Four have already set up Brexit teams to cater for the boom in demand for legal and financial services advice, as UK businesses prepare to adapt to post-Brexit world.