Banking sources say that 30 to 40 per cent of the 4,000 or so staff employed by Western investment banks in the Russian capital have been sacked.
SBC Warburg last month laid off 80 of its 240 Moscow staff. Another bank, MFK Renaissance, plans to lay off a similar proportion of its 700 staff, banking sources said.
So far no major institution has actually pulled out - partly through fear of not being allowed back - but at least four top-tier investment banks which were planning to open in Moscow in the next few weeks have put plans on hold.
Others, such as Goldman Sachs which recently opened an office in Moscow, and Merrill Lynch, which is upgrading its representation later this year, have opted to shelve plans to transfer key staff from London to Moscow for the time being.
Headhunters say that Russian employees, many of them lower-grade staff, as well as local researchers and traders, have borne the brunt of the layoffs.
London headhunters say they are receiving approaches from bankers and brokers who have been working in Russia and are worried about their jobs.
Dealing on domestic bond and share markets has ground to a halt. The only business being done is advisory - helping the Russians clear up the mess - much of it handled by corporate financiers flown in from London and New York.
Many big institutions have invested heavily in building up their Russian operations and were caught by surprise. Antal International, a UK-based recruitment consultant specialising in qualified managers and bankers willing to head east, last week cancelled a lease on office space. The chairman, Tony Goodwin, said the firm had intended to expand in Moscow, but plans were now on hold.