Collapse in share prices helps slash £1bn off staff bonuses

Bonus payments to workers tumbled by £1bn last winter, according to official figures yesterday that reveal the scale of the negative impact of the share price crash.

Bonus payments to workers tumbled by £1bn last winter, according to official figures yesterday that reveal the scale of the negative impact of the share price crash.

One-off payouts made during the traditional December to April bonus season collapsed in the four months to April 2002, the Office for National Statistics said.

This wiped out the extra £1bn paid out during the previous bonus season when workers cashed in on the gains made during the peak of the share price and dot.com bubble.

This implies that bonus payments are back to the levels seen during the 1999-2000 bonus season, although the ONS said it did not have figures for the total bonus pool.

The current City bonus season, which begins this month, is unlikely to show any improvement. A recent survey of investment banks in London showed that City bonuses are expected to be down by between 10 and 20 per cent.

The survey by the recruitment consultancy Armstrong International said that hundreds of staff are set to receive no payout at all and many in research and mergers and acquisitions are in line for only half of last year's bonus.

The trend in bonus payments is reflected by the ongoing cull of banking jobs. In total more than 60,000 employees have been laid off from Wall Street and the City since the market peaked in early 2000.