JPMorgan Chase could cut as many as 4000 of its own employees worldwide to accommodate an intake from failed rival Bear Stearns.

About 2000 JPM employees will be replaced by counterparts acquired in its takeover of Bear Stearns, insiders say.

Another 1000 to 2000 JPM employees may lose their jobs because of the slowdown in investment banking activity and credit market crisis.

The news came as rival Morgan Stanley was today expected to begin another big round of cuts. As well as footsoldiers, its cull is moving up the ranks with a number of managing directors in equity research going. In good years, MDs earn up to £1 million.

Executives at MD level have also been chopped at Merrill Lynch and Citigroup.

While there was no indication of how many jobs may go from the Bear Stearns merger in the bank's own City operations, JPM economists last month forecast that total London financial job losses across all firms could hit 40,000.

The credit crunch is claiming more than 300 jobs a week in the City. JPMorgan has already taken the axe to Bear Stearns jobs in London. It is shutting Bear's London-based private-client services operations with a team of 30, and is said to have put 62 of the 73 foreign exchange business workers in London and New York on notice.

JPM chief executive Jamie Dimon told investors the bank had offered jobs to about 6000 Bear Stearns staffers, leaving decisions still to be made on the remaining

3500. Most of these reportedly work in technology and operations.

• On Wall Street, executives are facing a lean bonus season but are still expected to do better than their London counterparts.

Investment bankers and traders in New York could see their endofyear pay down 10% this year, according to pay analysts Johnson Associates. Top executive bonuses could fall by as much as 35%, the firm reports. But on this side of the Atlantic a 40% crash in bonuses is expected.