Why Are Brexit Job Relocation Numbers So Low?

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We recently came across this Bloomberg article about the “Brexit banker exodus that wasn’t.”

As Bloomberg reports, “JPMorgan Chase & Co. is likely to relocate about 400 people outside of Britain, just 10 percent of an initial estimate of up to 4,000. Deutsche Bank AG will similarly now move a few hundred bankers to Frankfurt and other cities after Brexit, not the 4,000 it first thought. Morgan Stanley will send some 280 bankers to Paris and Frankfurt.”

So why are the numbers so low? A few things to consider:

  1. Given that there is still uncertainty about a second referendum (which we share more about here) banks are keeping their options open. We don’t expect them to move jobs in bulk until there’s a clearer path forward.
  2. The jobs that have been moved are primarily front office roles. We anticipate this will change in a few years when local regulators start asking for more oversight in country —that’s when compliance and risk roles will start moving, too.
  3. Banks might be using this as an opportunity to review their overall location strategies, taking the chance to offshore yet more roles from Western Europe to lower-cost locations like India, Eastern Europe, and South-East Asia.
  4. Finally, there are ways to move roles without announcing job cuts. For example, banks may introduce explicit or de facto hiring freezes in London while only allowing new hires in Frankfurt, Paris, etc. We anticipate there are a number of moving roles that aren’t being categorized as such.

Our business provides experienced consultants to global top-tier banks and we spend a great deal of time recruiting for supporting roles in the banking industry. So, we keep our finger on the pulse of substantive change. It’s our view that as banks finalize their 2019 budgets, they’ll have moves baked in for various Brexit scenarios. But the majority of those likely won’t come to fruition until late 2019 – 2020. Feel free to drop us a line at info@voxfp.com if you want to learn more.

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