Swiss investment banking giant UBS has issued a warning that up to 7,000 jobs could be lost from Australia’s banking industry in the next two years.

 

UBS's report suggeststhat  Australian banks may reduce their employee base as a cost-cutting exercise, suggesting that thousands of jobs would be lost from a number of larger banking groups, including Westpac, Bank of Queensland and ANZ Bank in response to a decreased demand for consumer and business credit.

 

The report also suggests that the European financial debt crisis is a major factor in a growing sense of unease and uncertainty in the Australian banking sector.

 

UBS found that many banks have hired substantially too many staff, which now account for around 60 per cent of the banks’ expenses.

 

Australian banks have added some 38,000 new staff since 2002, with total employment in the sector up to 179,000.  According to the report,  banks are now moving to cut down on staff numbers that were employed under the assumption that the current economic problems would have ended.

 

A senior figure from Deloitte Access Economics told Fairfax media that Sydney, which currently conducts half of the financial sector business in Australia, is expected to bear the brunt of the layoffs.

 

Major banks are already beginning to downsize, with ANZ warning staff of up to 1000 job cuts. The Commonwealth Bank of Australia has indicated it will cut opening hours in around 40 of its smaller regaional branches as part of its cost cutting program, with some job losses and shift from full-time to part-time work.