UK financial services will face large scale redundancies, says Clyde & Co

With potential relocation, and the limitation of freedom of movement, the financial services industry will likely face redundancies on a large scale due to Brexit, according to Clyde & Co.

Clyde & Co partner Nick Elwell-Sutton commented: “Unless the financial services passporting rules are resolved in the UK’s favour, then many large financial services businesses are likely to relocate to within the EU meaning large scale redundancies would be highly probable.”

Elwell-Sutton states that employers will also need to consider how they will be affected when the exit takes place: “Watering down of employment rights is unlikely to be an immediate government priority, however revoking freedom of movement means the ability to recruit skilled EU nationals which is currently taken for granted would be curtailed and they would be subject to whatever immigration and work permit rules then apply.”

According to Clyde & Co: “A key question facing many insurance businesses is whether or not any of their staff are utilising the free movement of citizens regime. An audit to identify which members of staff are affected is a critical first step, followed by discussions to determine how they can remain in their posts following the vote.

Commenting on the greater administrative burden that will be associated with these changes – and the possible increase in employment costs – Clyde & Co highlight that changes are likely to impact the business operations in a fundamental way: “It is important to align this work very closely with decisions on possible structures, so that any changes to the organisation designed to secure ongoing access to markets take into account how that might affect the location of senior management and other staff.”