There are warnings that Australia is on the verge of a white-collar recession, with thousands of jobs at risk in the finance sector.

Employment in the banking industry had rebounded after the steep job cuts during the global financial crisis, but that trend has now reversed.

The ANZ Bank is planning to slash hundred of jobs and the Royal Bank of Scotland is putting its Australian division up for sale.

The managing director of recruitment firm Carmichael Fisher, Michael Markiewicz, says a bad year for finance workers last year followed a boom in jobs in 2010.

"If I look at the year before last, it was as big a year as I've seen in my 30 years in the business," he said.

"But then it was followed by another drop. And I think, I mean, it's obviously too early to tell what 2012 going to bring, but nobody's talking very optimistically."

And 2012 has certainly started badly for finance sector workers.

The ANZ is planning hundreds of lay-offs over the first half of the year, while Westpac last year told investors that it would probably end this financial year with less staff than it started it.

Other banks have instituted pay or promotions freezes.

And the futures of around 400 Royal Bank of Scotland staff in Australia hang in the balance as the bank looks for a buyer for most of its local investment banking arm.

The bank's local division is confident of a sale, but some banking analysts say that confidence is misplaced given the large number of investment banking assets currently on sale around the world.

Mr Markiewicz says there is not much demand for staff, but an increase in the number of people on the look-out for jobs.

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"Demand is obviously down, significantly down in investment banking. On the other side, there are a lot of nervous people who are either out of work or worried they may be out of work," he said.

Hunting for jobs

The Finance Sector Union's secretary Leon Carter says bank workers who get retrenched are finding it hard to get another job.

"It is not an industry that is employing in large numbers at the moment," he said.

"It is hard for a worker that gets sacked from one institution to just walk into another job."

It is not surprising that it is hard to find work.

Bureau of Statistics figures show that employment in the finance sector peaked in August, before falling in the November quarter.

At 427,600, finance sector employment is still higher than a 3.5 year low of 388,000 set in May 2010, but several thousand lower than the previous quarter.

But Mr Markiewicz says it is not all doom and gloom.

"Some of the stronger areas are probably legal, risk, compliance, collections, processes," he said.

"Business improvement really; areas to drive costs down and drive efficiency and lessen the amount of risk."

But he also says local workers are facing increased competition from overseas bankers attracted by salaries that now look much more attractive due to the rising Australian dollar.