Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

City jobs gloom as Merrill cuts costs by pounds 150 million

MERRILL LYNCH cancelled its Christmas party and warned of bonus cuts yesterday as part of a drive to save pounds 150m a year because of the market turmoil that has slashed the earnings of City investment banks.

City gloom deepened as Daiwa Securities, which has lost nearly $1bn worldwide this year, issued P45s to 50 redundant staff, marking its second round of cuts this year.

In August the bank shed around 65 staff, or around 10 per cent of the total.

Staff at Daiwa were notified individually yesterday about the job terminations. A spokeswoman said last night that a formal statement confirming the redundancies will be made today, but dismissed a rumoured figure of 400 job losses as "ridiculously high".

Merrill Lynch, meanwhile, has yet to decide on how many of its 6,000 City-based staff jobs will be cut. But staff have been ordered to cut back on transport and entertaining spending by not flying first class, and by clearing expense account lunches in advance.

The latest cutbacks came just days after Banco Santander, the Spanish bank which took on the research arm of crashed Hong-Kong broker Peregrine earlier this year, announced 300 jobs were going in its investment banking offices in London, Hong Kong and New York.

On Friday West Deutsche Landesbank said it would retrench its London- based emerging markets business at a likely cost of 150-200 jobs.

In July, Nikko put 400 staff in the City on six months notice because of duplication with research teams at Salomon Smith Barney, although as many as 100 may have already found jobs elsewhere.

Salomon Smith Barney and Donaldson Lufkin Jenrette are operating unofficial hiring freezes.

Other houses which are planning to cut costs include Barclays Capital, which lost pounds 250m in Russia; Salomon, whose parent Travellers is planning to cut 8,000 jobs worldwide through its merger with Citicorp; ING Barings and Credit Suisse First Boston which have also lost significant sums in emerging markets over recent weeks.

There are also question marks over new office space being built by banks to house staff which will probably not now be needed.

Daiwa has cancelled plans to move to new City headquarters in Wood Street, while the construction of Deutsche Bank's new London offices is believed to have slipped behind timetable.

Wall Street, too, has become increasingly nervous about the jobs outlook after several years of unprecedented expansion.

It emerged yesterday that the co-chief executive and chief operating officers of Nomura America Holding had tendered their resignation late on Friday. It followed the disclosure last week that the Japanese parent had had to put in around $500m new money to its US subsidiary after it lost $275m mainly on mortgage backed bonds.

The pair - William Wraith, 41, and Mark McGauley, 35 - were said to have been paid $100m apiece over the last four years.

They are believed to be the highest profile casualties in the US securities industry so far.