Major banks have announced some 160,000 job cuts since early last year and with more layoffs to come as the industry restructures, many will leave the shrinking sector for good as redundancies outpace new hires by roughly two-to-one.
A Reuters analysis of job cuts announced by 29 major banks showed the layoffs were much bigger in Europe than in Asia or the United States. That is a particular blow to Britain where the finance industry makes up roughly 10 percent of the economy.
The tally of nearly 160,000 job cut plans, meanwhile, is likely to be a conservative estimate as smaller banks and brokers are also cutting staff or shutting up shop, and bigger banks have not always disclosed target numbers of layoffs.
The tally also does not include reports of 6,000 job cuts to come at Commerzbank, for example, which the German group would not confirm last week.
Well-paid investment bankers are bearing the brunt of cost cuts as deals dry up and trading income falls. That is particularly the case in some activities such as stock trading, where low volumes and thin margins are squeezing banks.
"When I let go tons of people in cash equities this year, I knew most would be finished in this business. It is pretty dead. Some will just have to find something completely different to do," said one top executive at an international bank in London, on condition of anonymity.
The job cuts eat into tax revenues usually reaped from the sector at a time when the global economic recovery is slowing.
This year's tax income from the industry in Britain could drop to around 40 billion pounds ($63 billion), compared to 70 billion in 2007/08, when the financial crisis hit, the Centre for Economics and Business Research (CEBR) think-tank said this week.
The job cuts announced since the beginning of 2011 come on top of job cuts already carried since 2009.
Of the 29 banks, from Europe's biggest bank HSBC to U.S. investment bank Morgan Stanley, just over 83,700 net jobs have been lost since 2009, with 167,200 jobs axed and 83,500 created.
Squeezed by regulations forcing banks to store up more capital in their trading businesses, firms are likely to shrink their investment banking units even further, as they overhaul their models to survive.
"It is structural as well as in response to cycles in the market. The market is still over-broked," said Zaheer Ebrahim at recruiters Kennedy Group.
Swiss bank UBS last month outlined a further 10,000 layoffs after announcing a plan for 3,500 job cuts last year. It said in October it had decided to exit most of its rates and debt trading units.
Workers in retail banking operation will not be immune to job cuts either, particularly in slowing European economies. In France for instance, bank executives predict retail revenues will falter.
"There are still 300,000 too many full-time employees in the top financial services players in Europe," said Caio Gilberti from the financial services practice of consultancy AlixPartners. Gilberti said cutting those jobs could lop just over 20 billion euros off banks' collective cost base.
As banks shrink, fewer of those leaving are able to find equivalent jobs at rivals, head-hunters and bankers said, and only a small proportion of those are qualified to move into other jobs at hedge funds, for instance, which look for specialized, skilled traders.
Mergers and acquisition dealmakers are now also coming under pressure, with fees in that area down 21 percent worldwide to $13.9 billion in the first nine months, Thomson Reuters data showed.
More senior investment bankers are among those in the line of fire. Those ranking as managing directors (MDs), who can command base salaries of around 350,000 pounds ($556,000), are becoming costly to keep - and difficult to take on.
"At MD level, it is tougher to accept smaller jobs, and they do not have the same drive and ambition as the young bankers who have just graduated," Ebrahim from the Kennedy Group said.
Many of those that have enjoyed lucrative careers in the fatter years are instead leaving big banks for good, setting up their own small consultancies or different types of businesses.