Gloomy market environment and government intrusions were being blamed by the banking sector for the projected job losses that the industry could witness this year, which could run to thousands of job cuts, media reports said.

The industry was initially rattled by reports that ANZ Banking Group mulls job separations measures that would affect some 700 ANZ staff while UBS Securities revealed in a report that the sector itself plans to implement deeper job cuts to deal with the current difficulties.

One in every 25 Australian bank workers could receive their walking papers this year, the UBS report said.

The overall number of those in danger of losing employment could easily reach 7000, according to Fairfax Media, as banks scramble to minimize their losses amidst the challenges they are battling.

Credit demands have reached record lows lately, according to Future Fund chair David Murray, hinting that lower margins for banks would lead to inevitable lesser employment opportunities in the industry.

Banks will have to resort to job cuts if only to stay afloat, Murray told the Australian Financial Review.

The former Commonwealth Bank chief executive complained that misplaced regulations imposed by the federal government practically pushed the banking sector to the wall.

In order to survive, banks will have to re-asses their cost structures, meaning structural adjustments will have to be implemented and pave the way for the horizontal displacement of a significant number of workers, Murray said.

Apart from job losses, the banking industry, UBS said, will be forced to farm-out some of its functions to realize more savings.

"A large number of non-client-facing roles could potentially be moved to more cost-efficient locations offshore," UBS suggested on its report.

All major Aussie banks have also indicated that workforce reductions would come as natural measures during difficult times but none confirmed specific numbers of employees that would get the axe this year.

Hints can only be offered by UBS analysts by observing "we expect the banks to be heavily focused on their cost bases."

"Solid reductions in headcount and discretionary costs are anticipated as banks react to the lower growth environment," UBS warned in a Bloomberg report.

And as financial hiccups were being felt overseas, many Australian professionals could soon lose employment and may find their way back home, faced with dwindling job opportunities here.

The expected influx this year of these new jobless Australians, casualties of downturns in Dubai, Hong Kong, London and New York, will further complicate the industry's already problematic employment conditions, analysts said.

With less jobs available and with looming job losses in the months ahead, many of these professionals, who carry with them valuable skills and experiences gathered from working abroad, will have to jostle for precious but scant job slots, experts said.

For an industry that prides itself in employing close to 180,000 workers in Australia, the scenario now being played out has indeed become dismal.