Thousands more jobs to go at City banks and brokers

Another wave of job cuts has swept the City as a series of investment banks and brokerages announced fresh redundancies ahead of the Christmas bonus season..

Morgan Stanley and ING led the latest round of job cuts while a number of brokerages and fund managers also made their first substantial cuts due to the downturn in stock markets.

Morgan Stanley, the world's second-largest bank, started to cut more than 2,000 from its global workforce two weeks ago, a task it expects to complete before the end of the year.

Like most investment banks, Morgan Stanley has suffered from the drought which has afflicted the IPO market and the dramatic reduction in other types of fee-producing work such as mergers and acquisitions in the past two years.

Morgan Stanley would not comment on the redundancies. They are expected to be concentrated in its US brokerage operations, with more than 1,400 staff likely to lose their jobs in this area.

The bank is also making some staff from its London office redundant, where it employs 4,700 bankers and other staff. Morgan Stanley is also understood to be cutting back in its leveraged financing division, an area which has not been popular with clients since the stock market slumped.

When the latest round of job cuts is completed by the end of the fourth quarter, Morgan Stanley will had shaved its headcount from its peak of 63,000 in the first quarter of 2001 by 13 per cent.

ING, the Netherlands-based bank, said it was cutting 1,000 jobs in its wholesale banking business to reduce costs amid difficult markets.

ING has already shed 700 staff from its wholesale banking unit. ING said it had taken a €128m restructuring provision for the third quarter to cover the cost of the lay-offs and other restructuring costs.

Meanwhile ABN Amro said it wanted to shrink its global workforce by 500. The bank said it was not embarking on a redundancy programme and would achieve the reduction as a general rule by not replacing members of staff who left.

Other parts of the financial services industry showed signs of feeling the pinch. Gerrard, the stockbroking firm which is now part of Old Mutual, is preparing to make some of its 1,200 UK staff redundant but would not say how many employees would go.

Old Mutual is in the middle of a restructuring programme in Britain. It has reduced its headcount in the past 18 months to 1,200 from 1,800.

Morley, the fund management business owned by the UK's largest insurer, Aviva, has also quietly laid off a handful of staff, in its first attempt to cut costs to address the fallout in investment management business.

In total more than 60,000 employees have been laid off from Wall Street and the City since the market peaked in early 2000.