City is biggest recession victim as new cull looms

It follows warnings that 370,000 jobs could be lost in London in the coming recession.

The worsening economic climate has also led Goldman Sachs to scrap 2008 bonuses for senior executives. The American investment bank blamed the global financial crisis but has also been under pressure from US politicians, incensed by the possibility of big pay deals while the taxpayer foots the bill for a bailout.

Back in the UK, the Local Government Association says that London will be the city in Britain hardest hit in a recession now expected to be more severe than in 1991. Overall, the capital is expected to shed 370,000 jobs across all sectors.

The biggest losers will be in the financial services industry, with JPMorgan the latest to plan job losses. They are expected to be on a similar scale to those of its rivals.

It is understood the firm is looking to shed 3000 jobs around the world.

That follows hard on the heels of last week's announcements by a string of banks cutting jobs.

Morgan Stanley plans to lose nearly 10% of staff across two of its three divisions and Royal Bank of Scotland is planning to cut about 3000 jobs in its investment banking division.

At Citigroup, up to 35,000 jobs could be lost around the world on top of the 23,000 it has already slashed this year. Goldman Sachs said last month that it was cutting almost 3300 jobs, or about 10% of its staff.

JPMorgan would not comment on its plans but has been forced to wield the axe by plunging profits — down 84% from last year. The firm has continued to struggle with writedowns on mortgage trading positions and leveraged loans, and higher credit costs due to continued deterioration in its home-lending portfolio.

Goldman Sachs is tightening its belt after setting a record for Wall Street pay last year, when chief executive Lloyd Blankfein pocketed $70 million (£47.5 million). Blankfein and six deputies told the bank's compensation committee they would forgo the year-end awards, a spokesman said. Each executive receives a salary of $600,000.

Company spokesman Lucas van Praag said the executives "believe it's the right thing to do".
"We can't ignore the fact that we are part of an industry that's directly associated with the on­going economic distress," van Praag said.

* Canary Wharf today signed a deal to build a massive new European headquarters for JPMorgan (pictured above) despite the impending job cuts at the investment bank.

The move is a major blow to the City of London, which had been fighting to keep the bank in the Square Mile.

Canary Wharf and the Corporation of London have been battling to win JPMorgan's new headquarters for well over a year.

Originally the firm had opted for a one million square foot development by property developer Hammerson situated between London Wall and Fore Street in the City. Now it has signed up to buy a site on the river front at the western edge of Canary Wharf.

Riverside South as it is called, pictured above in an artist's impression, has planning permission for up to 1.9 million square feet.

Initial plans are for two tower blocks of 43 and 31 storeys with five trading floors the size of football pitches stretching between them. JPMorgan has paid £237 million for a 999-year lease.