Goldman Sachs Is Considering Cutting Its London Workforce in Half After Brexit by Reuters @FortuneMagazine January 18, 2017, 11:34 PM EST E-mail Tweet Facebook Linkedin Share icons Two of Europe’s biggest banks warned on Wednesday that they could each move about 1,000 jobs out of London as they prepare for expected disruption caused by Britain’s exit from the European Union. UBS ubs Chairman Axel Weber said that about 1,000 of the Swiss bank’s 5,000 employees in London could be affected by Brexit, while HSBC hsbc-holdings-plc Chief Executive Stuart Gulliver said his bank will relocate staff responsible for generating around a fifth of its UK-based trading revenue to Paris. Germany’s Handelsblatt newspaper also reported that Goldman Sachs gs is considering halving its London workforce to 3,000 and moving key operations to New York and continental Europe, particularly Frankfurt, where it could move up to 1,000 staff. A Goldman Sachs spokeswoman in Frankfurt said the bank does not recognize the numbers in the Handelsblatt report and that it has yet to make a decision on the matter. Leading financial firms warned for months before Britain’s June referendum on European Union membership that they would move jobs out of the country if there was a vote to leave but have set out few details since on how many will go or where to. “We will move in about two years time when Brexit becomes effective,” HSBC‘s Gulliver told Reuters at the annual meeting of the World Economic Forum. And in another potentially damaging blow to London’s status as Europe’s main financial center, UBS’s Weber told the BBC in Davos that 1,000 staff working in businesses that would be hit by Britain losing its ‘passport’ to sell financial services in Europe would be affected. Other banks are expected to announce more concrete plans for how they will adapt to Brexit in the coming months after Prime Minister Theresa May confirmed in a speech on Tuesday that Britain would leave the European single market. Frankfurt Subsidiary Goldman staff moving to Frankfurt would include traders and managers responsible for regulation and compliance, financial sources told Handelsblatt. The bank is setting up a new subsidiary in Frankfurt to bring European operations together. Back-office personnel would move to Warsaw and investment bankers who advise French and Spanish companies would move to those countries, Handelsblatt reported, while trading staff who develop new products would move to New York. HSBC, Europe’s biggest bank, is at an advantage to its major U.S. rivals as it already has a large subsidiary in Paris that holds most of the licences needed by an investment bank, meaning that Gulliver has been able to set out more detailed plans. For more on Brexit, watch Fortune’s video: It is expected to move about 1,000 staff involved in trading products, such as European stocks, that are regulated by the EU. HSBC‘s global banking and markets division, which houses those roles, made a $384 million profit in the UK in 2015, a company filing showed. In 2016 UBS set up a bank in Frankfurt to consolidate most of its European wealth management operations in an effort to conserve capital and simplify its structure. Meanwhile, Lloyds Banking Group lyg is considering setting up a subsidiary in Frankfurt, though no final decision has been taken, according to a person familiar with the plans. The shift of jobs will be a blow to the City of London, which has been lobbying since the Brexit vote for financial firms in Britain to retain the EU ‘passporting rights’ that allows them to sell their services across the bloc. But passporting is unlikely to continue with Britain outside the European single market and companies say they are now likely to press ahead with plans to move staff, even though May said she would try to negotiate some form of market access. The City’s best hope will be for the government to agree a transitional arrangement whereby financial businesses can continue to operate out of Britain across the EU for a number of years after Brexit, in the hope that a favourable access deal is achieved in the interim. “We would like to see a transitional agreement announced as soon as possible,” Mark Boleat, policy chairman at the City of London Corporation, said in a statement after May’s speech. HSBC shares closed 1.8% up, against a 0.2% fall in the broader European banks index. UBS shares were down 2.1%.