Industry has shouldered the bulk of job threats

Higher-paid finance workers, and particularly equity and bond traders, may be reporting huge losses in business confidence, as the Confederation of British Industry warned on Monday.

But at least they were still able, as salaried employees, to air their fears of lower commissions.

Salaried and, indeed, typically well-bonused employees too.

Officials statistics on Wednesday showed that bonuses paid out in February, the middle of the awards season, were �400m higher than a year before - Barclays alone has rewarded its top earners with "little somethings" totalling �150m.

Relatively low award levels, as given by ABN Amro, have been accompanied by reports of unrest and defections rather than "thank yous" that P45s were not enclosed.

"[ABN] seems to want to be a top five bank but also pay peanuts," one employee told The Independent newspaper. "It wants to have its cake and eat it."

'Thundering Herd'

The coming of spring and the lengthening days seem to have banished employment gloom from City dealing rooms to West Lothian production lines.

They are meant to be cutting 15% of our staff next week - I'll soon have the time to write my memoirs

Merrill Lynch employee

"They are meant to be cutting 15% of our staff next week," a Merrill Lynch employee told BBC News Online a month ago. "I'll soon have the time to write my memoirs."

The literary world, it seems, will have to wait. Merrill Lynch, nicknamed the "Thundering Herd", has retained all but a fraction of its City hoof power, with some 100 stockbroking staff and some IT contractors said to have been clipped last week.

"So far so good," the employee said on Wednesday.

'Strategic' losses

Not that the UK's finance sector has been immune to job losses. ING Barings in January cut 500 jobs from its City investment banking operations, while bonus-happy Barclays in January announced a tie-up with Legal & General which will cost 750 posts.

The door-to-door salesman: a dying breed

The next month Prudential, Britannic and Sun Life Financial announced cuts totalling more than 5,000 jobs. Lloyds TSB's proposed takeover of Abbey National threatens 9,000 posts.

These cuts, however, are poor indicators of the City's health, a leading bank analyst told BBC News Online.

"They are the result of strategic moves which happen in good times and bad," he said.

They are part of the ongoing struggle which reduced to background noise the loss of 150,000 jobs, generally among lower-paid grades, in the 1990s.

Cashier jobs

The average salary of staff threatened by the Lloyds/Abbey merger is "probably about �14,000", finance union Unifi told BBC News Online.

"We are talking about cashiers in branches being closed," a union spokeswoman said.

When hallowed financial institutions combine, it seems as if the bottom layers of the company pyramid are removed first to ensure smooth union.

Business slump

Yet, ironically, if there is one breed of City tycoon that may fall foul of the current downturn, it is the merger and acquisition (M&A) specialist.

City employment has risen despite stock market scares

Despite high-profile City mergers, overall global M&A activity was down more than a half in the first three months this year, compared with the boom time of early 2000, a survey by Computasoft Research suggested.

In the City, the value of mergers announced in the first quarter was, at $455bn (�316bn), less than 40% than that of a year before, Thomson Financial said.

So why have corporate financiers, so far, retained their jobs?

"You would think, with staff costs making up 70-80% of the outgoings of an investment bank, staff would be the first thing to go," the Merrill Lynch contact said.

But banks have learned from their experience of the so-called Asian crisis of 1998, when a slump in markets was followed by an equally dramatic rebound.

"They laid off loads of staff only to find they needed them again when the markets came back again. So they had all the usual costs of hiring, plus they needed to pay out on golden handshakes on top to give people confidence in their job security."

Nonetheless, the opinion of the City workers that BBC News Online spoke to was that lay-offs may begin soon among corporate financiers unless they find the work to keep themselves employed.

Volume key

More secure, ironically, are the jobs of those working more directly with the markets whose plunges have prompted the job fears - those nearest the scene when the dot.com bubble exploded a year ago.

People can make money as long as there are sufficient deals to make a decent turn

Bank analyst

For a while, the idea that falling markets means fewer jobs may seem attractive, but it is wrong, the bank analyst said.

"The volume of trading is the crucial thing to look for," he said. "People can make money as long as there is movement, either way, to exploit, and sufficient deals to make a decent turn."

And while the FTSE 100 index of leading UK shares last month declined to levels last seen three years ago, the equity markets are booming in terms of volume.

Deals hit record

In terms of the number of share deals struck, FTSE 100 companies have just had their best ever three months, with more than five billion trades, worth a total of �430bn, completed on the London Stock Exchange.

The value of deals last month was, at �146bn, almost twice that achieved in March 1998.

While sales of ISAs may have slumped, savers generally have only a small proportion of their holdings tied up in these types of investment.

"People generally have more cash going towards their pensions, and it is the pension funds which are responsible for such a huge part of equity trading volumes," the analyst told BBC News Online.

What might disrupt the progress of City slickers more is mass joblessness elsewhere in the economy, which would then hit pensions saving.

But, despite Marconi, Corus and Motorola setbacks, unemployment is still on a downward trend, the CBI believes.

Bizarre indicators

Not that such predictions are always 100% accurate. Indeed, in turbulent times, forecasters often call on a host of bizarre indicators of City prosperity.

The London taxi: a financial indicator?

A favourite is to count the number of cranes towering over the Square Mile.

Other observers prefer to analyse sales of luxury goods, or count the number of taxis on the road or property "For Sale" signs.

They might like to know that LVMH shifted more champagne last year than in 1999, when the millennium prompted a 35% surge in sales.

And on Wednesday, Maganese Bronze, the manufacturer of London taxis, reported it had sold 356 vehicles in March, more than double the number sold a month before.