Goldman Sachs is demanding UK contractors take a compulsory 15 per cent cut in day rates, and staff have been told by agencies that this was a "take-it-or-leave-it" offer without room for negotiation.
The cuts begin this week, and there are expected to be some job cuts too. Goldman Sachs has previously announced a ten per cent cut in staff numbers.
We can also reveal that Barclays Capital is cutting jobs within its IT department - about 40 people are expected to lose their jobs in the UK.
Barclays Capital is looking for voluntary and compulsory early retirements to reduce headcount.
The news is hardly surprising given current problems, but staff seemed to think the recent takeover of Lehman Brothers would make their jobs safer. Barclays, and HBOS, have previously demanded contractors take pay cuts.
Lloyds TSB raised fears yesterday that its takeover of Halifax Bank of Scotland would lead to serious job cuts when it announced potential savings of £1.5bn at the merged bank.
The company told shareholders it had carried out detailed analysis of areas of overlap between the two businesses. It expects to cut £45m from central and support functions by 2011. In wholesale and international banking it expects to save money by laying off overlapping management functions and integrating processing and IT platforms. This should save the firm £430m annually by 2011.
It is looking to its UK retail business to cut £790m from annual costs by closing branches, call centres and removing associated managers, as well as by integrating process and IT platforms at the two banks. The insurance and investment arms will provide the final £235m in cuts.
The new company will be called Lloyds Banking Group plc: the full statement is here (pdf).
Lloyds has appointed Mark Fisher as director of group IT & operations - he was previously at Royal Bank of Scotland but had been seconded to ABN Amro to oversee integration after it was bought by RBS.
Goldman Sachs and Barclays Capital refused to comment on this story.
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