One of the key destinations for financial jobs, Singapore is fast losing its lure as bank layoffs threaten the once robust job market in this Southeast Asian city state.
"The [job] cuts have been ongoing for about the last 12 months within the major investment banks," Adam Faulkner, manager at recruitment firm Michael Page in Singapore said. "The cuts have been surprisingly protracted. It's been going on longer than most people expected."
Earlier in the year, recruitment firms told CNBC that there had been a significant increase in the number of European bankers wanting to relocate to Singapore amid deteriorating market conditions at home.
(Read more: Bankers Fleeing Europe Crisis Head to Singapore)
Major global banks have announced
For example, the number of financial services jobs for Singapore posted on the popular employment website eFinancialCareers fell by 5 percent in the third quarter compared to 2011, and is down 4 percent since the start of the year.
Recruitment firms told CNBC that the investment banking sector was the hardest hit and the slowdown will continue to deepen into the year-end as cautious firms weed-out non-performers and await direction from major global markets.
Faulkner of Michael page said those most affected by the job cuts are foreigners working in Singapore whose contracts are either being cut short or not being renewed.
"So if someone was at a bank in London and they'd been posted to Singapore for two years, earlier they may be able to ask to stay for another year or two. But now they're saying you need to go back or you'll be made redundant, there's no job for you here," said Faulkner.
Low taxes, warm weather and home to 120 commercial banks, Singapore has been an attractive location for expats working in the financial sector, but now market watchers say the "appetite" for expatriates is a lot lower.
Briton Alex Erskine, for example, recently moved to Singapore from London with seven years' experience in the banking industry on hopes of landing a job, but was surprised to find limited career opportunities here.
"Obviously I knew that the market globally is pretty slow and that banks are fairly fearful at the moment, trying to decrease their fixed costs... But I still did think that there would be a little bit more demand," Erskine said.
After going through the application process with a number of banks, which the 32-year-old described as "slow," with few openings, he decided to make a career change and accept an offer from a technology firm instead.
"I wasn't overly confident that I was actually going to find the appropriate job with a bank," Erskine said.
Taking a Pay Cut
Besides, compromising on job profile, jobseekers in Singapore have also had to lower salary expectations, according to recruiters.
Craig Brewer, director of banking & financial services at executive search firm Hudson in Singapore said someone looking for a senior level job in investment banking may have to be ready for a 15 percent cut in salary compared to last year.
"A lot of those guys now who haven't found their way back into the market are willing to take a cut on their last salary," Brewer said.
Even those executives who are sought after are only getting modest pay hikes when they switch jobs.
"For someone to get a 10 percent pay rise to change companies, they're doing well," Faulkner said. "There was a time where 20 percent pay rise to change employers was quite normal and in fact some candidates wouldn't consider anything under 20 percent."
Opting for Locals
Companies in the financial services sector have also begun to hire more locally than go for higher-cost expatriates, as the government tries to tighten foreign worker inflows in response to concerns voiced by Singaporeans, who feel they have to compete with foreigners for jobs.
"Every client I work with is saying in no uncertain terms that we would prefer, if not insist, on a Singaporean hire," Faulkner said.
Also, the talent pool in Singapore has grown significantly together with the country's financial sector giving companies more candidates to choose from than about five years ago.
Are Jobs Gone for Good?
As global banks restructure themselves in the new economic and regulatory environment, market fears are ripe that some jobs that have been lost may never come back.
"In the current environment, it's unlikely we'll see the same number of people employed in those functions in the future," said George McFerran managing director, Asia Pacific, eFinancialCareers.
He, however, added that, "It's not a no hiring environment, but it's a low hiring environment at the moment — there are definitely hot spots of activity within the job market. I think the industry is in the process of resizing itself to the current market conditions and they're very different from the one that existed three or four years ago."
Erskine, meanwhile, says he's happy he got out of the banking sector, because it's only going to get tougher for the industry.
"I think for me it's going to be a good long term move, but we'll see," he told CNBC.
- By CNBC's Rajeshni Naidu-Ghelani.