Investment banks Schroder Salomon Smith Barney and Deutsche Bank have begun a fresh round of job cuts in London, banking sources say.
Schroder Salomon, part of banking giant Citigroup, is said to be cutting around 10 per cent of staff in equities research and also around 50 junior level jobs from its corporate finance department, according to equities research and banking sources familiar with the situation.
Citigroup had no specific comment, but issued a statement which said: "Given the market realities, we are continuing to make targeted reductions throughout the organisation."
Investment banks, facing the most severe industry downturn for three decades, have already cut more than 100,000 jobs globally in the last two years.
Now they are shedding again or planning further culls in the absence of any revival of lucrative mergers activity or in the IPO market, with few companies seeking to float in current depressed equity markets.
Banking sources said Deutsche Bank was in the process of making cuts in its corporate finance section, with one source estimating it was cutting around 10 per cent of staff from teams covering various industry sectors.
"Out of sector teams of say 40 people I think you'll see about 10 per cent going," said one banking industry source.
Deutsche had already planned to cut more than 14,000 jobs as part of a drive to rein in costs by two billion euros annually by the end of this year.
Equities research sources said there was talk that Goldman Sachs was looking at restructuring its equities business in London, which could mean cuts in equities research and sales.
Merrill Lynch, which has cut about 30 per cent of staff since the end of 2000, could trim even more.
Equities sales and research staff are in the firing line because of an unrelenting decline in the country's stock market and also because of US reforms banning investment banks from paying equities research out of revenues earned by corporate finance departments.
Many equities analysts, highly prized and rewarded with fat bonuses during the stock market boom, may now face the chop because of the dire market conditions.
US reforms imposed after a string of scandals on Wall Street over biased research uncovered by New York Attorney General Mr Elliot Spitzer mean analysts' pay can no longer be linked to corporate finance or M&A deals.
Banks are already starting to reduce the number of sectors they cover and drop coverage of small and middle sized companies.
The FTSE 100 share index of the blue chip companies ended 2002 with its third consecutive year of declines and has already fallen 13 per cent since the start of this year.
"Unless you see a major recovery in volumes or values, every brokerage house is looking at revenues being down 15 to 20 per cent," another equities source said.