JP Morgan is to cut 2,000 jobs from its investment banking division after revealing a 91 per cent drop in third-quarter profits.
Net income for the three months to September fell to $40 million from $449 million a year earlier.
The company says it take $450 million to cover the cuts and other restructuring measures, $300 million of which will be taken in the fourth-quarter, the remainder in 2003.
JP Morgan believes it will save about $700 million a year from the lay-offs, or an average of $350,000 per position eliminated.
Worst hit is the group's investment banking sector, which had made an operating loss of $256 million, compared with operating profits of $702 million previously.
JP Morgan Partners, the bank's venture capital division, had an operating loss of $284 million in the quarter against a loss of $153 million a year ago.
Losses in the private portfolio and public portfolio are concentrated in the telecoms, media and technology sectors.
Vice chairman Mr Marc Shapiro says the bank is working to reduce its exposure to the telecoms sector.
PA