Thousands more City jobs to go at two major banks

Nomura, the Japanese bank which bought most of the London operations of failed Lehman Brothers, is proposing to cut 1,000 people in the capital.

Credit Suisse, based in Canary Wharf, is set to axe 5,300 jobs worldwide primarily in its investment banking division. Of these, 650 jobs will go in London.

But the biggest cuts could be yet to come with reports from the United States saying that Bank of America is set to treble the number of jobs it plans to cut to 30,000 after its recent takeover of the world's biggest stockbroker Merrill Lynch. That deal will be formally completed early in the New Year and is likely to lead to thousands more redundancies in London.

City recruitment firm Michael Page issued a profits warning today saying that the "loss of confidence is now more marked and has spread rapidly in November".

State Street, the massive US fund management business with offices in Canada Square, Docklands, is cutting 1,700 jobs around the world.

Carlyle became the first major private equity firm to shed jobs in the current financial crisis saying it will lose around 100 posts. UK venture capital firm 3i is also expected to confirm around 100 job losses today.

Financial analysts now believe that the present credit crisis will cost up to 100,000 jobs in the UK financial services sector with culls going right up to the level of senior director. Bonuses in the City are likely to be slashed hugely or cut altogether this year.

Nomura took on about 3,000 former Lehman staff when it bought the London operations of the bank in September. At the time it said it hoped to save a "significant proportion" of those posts. But today it announced it will shed up to 1,000 jobs and said: "This will ensure that the company remains competitive in the current market conditions, and establishes the right cost base going forward." After the takeover the bank now has two major offices in London. Nomura House in the City has room for just 1,700 employees while the former Lehman building on the waterfront at Canary Wharf used to house more than 5,000.

Credit Suisse said its job cull would see 650 people lose their jobs in London. The worldwide cutting of 5,300 employees means it will lose around 11 per cent of its total workforce. It will also lay off 1,400 contract workers who provide services such as IT and catering.

The bank said it had decided to accelerate its cost-savings plan in the light of recent conditions in financial markets. It added that this meant it would "substantially reduce the scale of its operations in more complex products and the exit of certain proprietary and principal trading activities".

These are the areas of investment banking largely responsible for the $1trillion of losses and write-downs across the financial services sector over the past 18 months.