'Mack the knife' wields the axe as 2,000 jobs go at CSFB

Credit Suisse First Boston is to cut 2,000 jobs, or 7 per cent of its global workforce, as part of a cost-cutting drive designed to save $1bn by the end of next year.

CSFB's core investment banking division will be particularly hard hit, with at least 700 of its 3,800 staff facing the axe. The cuts will be spread roughly equally across all locations, with at least 500 jobs going in London, including positions in related functions, such as sales and research in both bonds and equities.

A spokesman for CSFB said: "We're trying to size the business for the current market conditions." The expected moves follow the appointment of John Mack as CSFB's chief executive in July.

Mr Mack gained the nickname "Mack the Knife" for overseeing aggressive job cuts while at his former employer, the rival investment bank Morgan Stanley.

CSFB's cost base is among the highest on Wall Street thanks to guaranteed salaries and bonuses offered to retain staff during the new issues boom of 1999 and last year. Staff with guaranteed packages are not thought to be among those losing their jobs.

The moves should save Credit Suisse, CSFB's Zurich-based parent, $1bn (£690m) annually. The bank also warned that its exposure to the insurance and aviation industries would see it lose 300m Swiss francs (£129m) in the third quarter.