Goldman and Morgan Stanley set to wield the jobs axe again

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Goldman, which has already cut 10% of its 32,000 global workforce including 600 of the 6000 based in the City, is considering another cull as it battles its way through the global financial crisis, according to the Wall Street Journal.

The report also said Morgan Stanley may decide on another round of job cuts, laying off up to 5% of its 47,000 employees as markets continue to fall and investment banking and trading businesses remain sluggish. The bank showed 7000 staff the door last year, including more than 500 at its UK headquarters in Canary Wharf.

Both banks refused to comment.

Thousands of jobs have already been lost in London as a result of the crisis crippling financial markets and the billions of pounds lost in the credit crunch.

Bank share prices have crashed although Goldman and Morgan Stanley have bounced off their late-2008 lows, thanks to support from the US government. Both banks gave up their status as investment banks last year so they could take advantage of emergency federal funding if needed.

The job cuts at Morgan Stanley, yet to be finalised, are likely to affect back-office and support staff including those in technology, infrastructure and human resources. There could also be cuts in riskier trading businesses.

Goldman has also yet to finalise its latest round of blood-letting, with numbers and details said to depend on market conditions.

The prospect of another cull at Goldman will send shock waves through the City and Wall Street. The bank, founded in New York in 1869, for years saw itself as immune from the problems that afflicted other investment banks. However, it has been unable to escape the carnage of the past 18 months.