Financial firms in London, besieged by Europe’s sovereign-debt crisis, probably will shrink their workforce this year, snapping a hiring rebound from 2008’s credit crisis as New York’s industry ekes out job growth.
Banks, insurers and other financial-services firms may eliminate about 3,000 jobs across greater London as companies in the New York region add 9,000, according to U.K.-based researcher Oxford Economics Ltd.
London’s proximity to the debt crisis is undermining the city’s efforts to gain on its trans-Atlantic rival. While Wall Street also is suffering from a global slowdown in trading and deal-making, North American banks are benefiting from a surge in consumer lending.
“Europe is still going into deeper waters, which would make London less attractive, more risky” for employers, said John A. Challenger, chief executive officer of Chicago-based Challenger, Gray & Christmas Inc., which advises firms on workforce reductions. “Momentum for the lead has turned back toward New York and the U.S.”
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