Fears of job cuts at JP Morgan

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The Independent Online
JP Morgan, the American investment bank at the centre of rumours it may be seeking a merger with its UK rival SG Warburg, is launching a campaign to cut costs. Morgan yesterday refused to confirm or deny reports of plans to sack a tenth of its wo rkforce.

Cuts have been forced on the blue-chip Wall Street firm by sharply lower profits in 1994. Wall Street sources indicate the job losses could hit up to 10 percent of its 17,055 employees.

The news prompted further speculation by analysts that JP Morgan may be restarting merger talks with Warburg, after discussions were held in 1993. Warburg's share price continued its run yesterday as dealers look for an alternative partner to Morgan Stanley.

Warburg itself cut 180 jobs recently when it shut its Eurobond operations. Other Wall Street firms have been forced to shed jobs after a bad year for bonds and other markets. Goldman Sachs is thought to be laying off at least 900 employees, including many in London.

Michael Patterson, Morgan's chief administrative officer, confirmed that the bank expected to make some staff cuts.

The bank declined to describe the cost-cutting plan in detail. A bank source said: "We are focusing on expense control. Expenses have continued to rise. But we are not targeting staff cuts."

Sources suggested that Morgan was planning to reduce costs and staffing before last year's poor markets provided a spur to put the plan into effect.

JP Morgan's chief executive, Douglas "Sandy" Warner, issued a memo to staff on 25 January saying the bank had not set targets for across-the-board job cuts but must "pause and consider whether every position is needed".