Charlie Edwards
Senior Researcher
Charlie Edwards writes, lectures and consults on national security, resilience, defence and intelligence. He works with international institutions, government departments, companies, and NGOs. He is a regular commentator in the national and international media.
at 8:24pm
on Thursday, 18th September 2008
Early this morning Patrick Hosking, banking and finance editor of the Times newspaper, told Sky News that a senior banker estimated that 40,000 jobs would be lost in the LloydsTSB takeover deal with HBOS. Newspaper headlines & broadcasters duly ran the story. But where did the figure, 40,000 come from? At the time of the interview it could only have been an intelligent guess by the senior banker; at worst, a wild stab in the dark. But doing some lite research it's possible to come up with an answer. It turns out the number 40,000 is rather popular when it comes to describing potential job losses.
In January this year Royal Mail began a round of cost-cutting that unions feared would trigger 40,000 job losses. In March there were fears that 40,000 manufacturing jobs could go to France if Airbus won a highly controversial contract for the DOD. In the same month economist Brian Bethune suggested as many as 40,000 jobs could be cut from U.S. payrolls. In April analysts at JPMorgan said job losses in London’s City financial district could be around 40,000 (Double the figure first feared). In June it was reported that Deutsche Bahn, Germany's state-owned rail operator, would shed up to 40,000 workers in an effort to boost efficiency. In July it was announced that 40,000 jobs in the private sector had been lost in Ohio since 2000. And early this month the New York Governer said Wall Street might lay off 40,000 workers in a worst-case scenario following.
If you scan google now you will find that 40,000 customers remain without power after Hurricane Ike and up to 40,000 litres of sewage has poured into Whangarei Harbour (New Zealand) after a sewage pump failure. These stats could be true, however we know they are only estimations.
As Dan Gardner suggests, psychologists have demonstrated time and again that it is almost impossible to keep bogus statistics from worming their way into our brains and influencing our judgement. It may turnout that the senior banker was right in his estimation. But it's very likely that the number 40,000 was already etched into his brain and in the turmoil of city life he plucked it out without even thinking.
In January this year Royal Mail began a round of cost-cutting that unions feared would trigger 40,000 job losses. In March there were fears that 40,000 manufacturing jobs could go to France if Airbus won a highly controversial contract for the DOD. In the same month economist Brian Bethune suggested as many as 40,000 jobs could be cut from U.S. payrolls. In April analysts at JPMorgan said job losses in London’s City financial district could be around 40,000 (Double the figure first feared). In June it was reported that Deutsche Bahn, Germany's state-owned rail operator, would shed up to 40,000 workers in an effort to boost efficiency. In July it was announced that 40,000 jobs in the private sector had been lost in Ohio since 2000. And early this month the New York Governer said Wall Street might lay off 40,000 workers in a worst-case scenario following.
If you scan google now you will find that 40,000 customers remain without power after Hurricane Ike and up to 40,000 litres of sewage has poured into Whangarei Harbour (New Zealand) after a sewage pump failure. These stats could be true, however we know they are only estimations.
As Dan Gardner suggests, psychologists have demonstrated time and again that it is almost impossible to keep bogus statistics from worming their way into our brains and influencing our judgement. It may turnout that the senior banker was right in his estimation. But it's very likely that the number 40,000 was already etched into his brain and in the turmoil of city life he plucked it out without even thinking.
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Sir Victor described estimates that up to 40,000 jobs could be lost from the combined 142,000-strong workforce of Lloyds TSB and HBOS as ridiculous. However, he declined to make his own estimate, saying only that he would find cost savings of well in excess of £1 billion within three years. He declined to rule out compulsory redundancies but pointed out that both banks had a good record of treating employees well.
The deal will not be completed until the turn of the year and the cost savings target is over three years, so any job losses could be some time away.
One expert, Jason Knight, of the management consultant PIPC, which advised Royal Bank of Scotland on its merger with National Westminster Bank in 2001, said that job cuts from the Lloyds TSB/HBOS takeover were likely to be substantial. “The numbers bandied about of 20,000 to 40,000 are not going to be far off,” he said.
Jason Knight is the man!