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With more and more people using ATMs, internet banking, and payday loans Australia as means to get instant cash, it is no surprise that there is a growing expectation nowadays that the major banks are about to embark on a big job-shedding program.

Likewise, with more and more customers doing a big part of their shopping online, the retail revolution, though it only has begun, is happening with a rush now, helped by the strong Australian dollar.  Retailers are now finding themselves in need of a lot less shop staff, who will be needed to help customers decide what to buy.

Currently, speculations are running rampant that as many as 7000 jobs in banking could be lost as banks are clearly preparing for a new wave of cost-cutting because of slower lending growth and higher funding costs along with retailers having been closed down and reducing staff for a while already and are expected to keep doing it. It has quite become more conceivable that the banks are about to enter an era of far more substantial job losses and structural change.

Meanwhile, the manufacturing industry is also finding themselves in jeopardy through government funding of the car industry.

These industries - banking, manufacturing, and car industries – are Australia’s three biggest employers, each of which is now in a downturn for both the same and different reasons. Now, these industries are finding themselves in need of fewer workers and less real estate – offices, shops, and factories.

This week Jonathan Mott of UBS predicted that there will be at least 7,000 jobs which would go in the banking industry. He predicted that the banks’ staff numbers would be cut to 172,000 over two years from 179,000.

According to Stephen Bartholomeusz in his Business Spectator post, because demands for credit, both at the household level and from businesses, have fallen to multi-decade lows, banks will have to reshape their business models, cutting costs

The same with retailing and manufacturing, as demands for products are decreasing, there is nothing one can do but reduce costs. And for banks, retailers, and manufacturers, that means staff.

Jonathan Mott stated that banks have been “lax” on costs, as they were “investing for growth”, increasing staff by 7 per cent a year for a decade, compared with 2.7 per cent a year the previous decade.

Now, that growth of 14-16 per cent compound annual growth in lending has now evaporated. Banks are now entering a new era of low volume growth as their customers retrench debt.

Currently, the mining and energy industry are the only sectors that are investing and borrowing large sums in Australia and the local banks haven’t got much of a foothold there as the big projects are funded globally.

Moreover, with 80 per cent of mortgagees not reducing their repayments as they just increase their principal repayments and keep the monthly mortgage payments the same, mortgage rate cuts are now only tend to accelerate the reduction in lending growth.

Likewise, with almost everybody now using ATMs and internet banking these days as well as online cash loans providers, less and less people are going into branches to get cash, transfer money, or pay bills.

Now, a revolution has happened in banking that is not yet reflected in the way they operate. This may mean the reduction in banking employment will be a lot more than 7,000 over the next few years.

Likewise in retailing, most strip shopping centers are being hollowed out due to the fact that more and more consumers are engaging in online shopping combined with weak consumer spending.

As for manufacturing, with the Australian dollar not coming down in a hurry, exporting and competing with imports will still remain difficult, if not impossible.

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Source : BUSINESSSPECTATOR.COM.AU