City banks set to prune more jobs

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The Independent Online
CITY BANKS are preparing more staff cuts as a result of the global economic turmoil, with the brunt being borne by emerging markets operations.

Warburg Dillon Read is set to prune 30 corporate financiers in London as part of a programme to slim its global workforce by a couple of thousand. The cuts reflect the anger of Warburg's Swiss parent UBS at the investment bank's involvement with the stricken US hedge fund Long-Term Capital Management.

Other banks which are expected to make cuts totalling at least 300 in London alone include Salomon Smith Barney, BT Alex.Brown, JP Morgan and Chase Manhattan.

The cull got into its stride last week when Merrill Lynch cut 3,400 jobs worldwide, including 400 jobs in London, and ING, which bought Barings, laid off 1,200 globally.

This week Citigroup is expected to announce cuts at Salomon Smith Barney, possibly along with its results on Friday. Salomon, the US based bond powerhouse, employs 1,800 at its London base in Victoria. Last week Salomon laid off 100 people on the bond side but insisted it was not contemplating a "Merrill-style cull".

BT Alex.Brown, which bought NatWest's equities division when the latter got out of investment banking last year, pulled out of what it calls "emerging European equities" last week, with the loss of 12 jobs in London.

It is cutting its global numbers by 1,200, which could hit its 2,500- strong London workforce hard. BT Alex.Brown reports its third-quarter results on Thursday.

Nomura Securities, due to announce its results this week, was also rumoured to be preparing job cuts. Another Japanese firm, Daiwa Europe, has already announced job losses.

The turmoil in financial markets will prompt a further round of consolidation, according to analysts, and this has led to rumours on who will merge with whom. Press reports over the weekend suggested that Deutsche, which bought Morgan Grenfell and employs 4,000 in London, has approached Lehman, having already been rebuffed by JP Morgan.

A spokesman for Deutsche said: "We never comment on market rumour."