The inevitable layoffs are beginning in earnest on Wall Street. And in come cases, the first sign that a banker has been axed is his or her e-mail stops working.
It is not just the worst victims of the credit crisis, such as Citigroup and Lehman Brothers, that are thinning the ranks. JP Morgan, which has widely been seen to have faired better in the subprime mess that plagued many other banks and which acquired Bear Stearns in a hastily arranged marriage, told CNBC on Tuesday that it was cutting about 200 executives.
The move comes after layoffs have been announced at more likely candidates. Earlier this month, The New York Times reported that financial institutions have laid off 65,000 since last summer and more are expected in the coming months.
According to the NYT article, the first sign that you are getting a pink slip is your e-mail stops working. This is the modern version of a long-time Wall Street practice of cutting the phone lines to keep soon-to-be fired employees from contacting their best clients.
About 30,000 cuts have occurred at Citigroup, one of the worst hit by the subprime crisis.
Merrill Lynch has announced about 4,000 people lost their jobs so far this year.
It’s not just executives in the mortgage businesses that are getting the ax. At JP Morgan, the cuts hit the M&A department the hardest, with nearly half of the layoffs. A spokesperson told CNBC that most of the cuts were among junior bankers.