JPMorgan to Cut Investment Bank Staff

Updated from Thursday, Nov. 20

NEW YORK -- JPMorgan Chase (JPM Quote) is shedding about 10% of its investment bank staff in an effort to better weather the global economic slowdown.

The New York-based banking giant is making cuts that are likely to be in line with its competitors Goldman Sachs (GS Quote) and Morgan Stanley (MS Quote), said a person familiar with the matter on Thursday. The person spoke on condition of anonymity because the cuts have not been publicly announced.

JPMorgan's shares fell dropped $5.09, or 18%, to close at $23.38, and earlier reached $22.32 -- their lowest point since 2003.

As of the end of the third quarter, JPMorgan's investment bank employed about 31,000 people. That includes the roughly 7,000 employees added to the roster when the bank acquired Bear Stearns in March.

The cuts will be across all levels and all regions globally, the source told the Associated Press, and will be made through the end of the year.

JPMorgan is following in the footsteps of its competitors, who are slashing workers from their payrolls by the thousands amid market turmoil and the ongoing credit crunch.

Investment bank Goldman Sachs is cutting about 10% of its work force, and Morgan Stanley outlined plans last week to also cut 10% of staff in its institutional securities group -- its biggest business that covers everything from investment banking to stock trading. The layoffs follow a 10% cut made earlier this year in the same group. Morgan Stanley also plans to restructure its money management business by cutting 9% of its staff.

Meanwhile, Citigroup(C Quote) announced plans earlier this week to shed about 53,000 more employees in the coming quarters. The New York-based bank, which has already reduced its assets by about 20% since the first quarter of the year, also plans to trim expenses by 19% in 2009 from third-quarter levels, to $50 billion.

JPMorgan has already been eliminating some jobs due to big profit hits from the financial crisis, and redundancies following the buyouts of Bear Stearns and failed thrift Washington Mutual.

The bank cut at least six equity sales officials in New York on Thursday, according to a Reuters report citing an unnamed person familiar with the matter.

Britain's Sunday Telegraph newspaper reported this week that the bank will likely eliminate thousands of jobs worldwide next year and that it has begun consulting on job cuts. The Telegraph said the cutbacks will likely be on a comparable scale to those of JPMorgan's rivals, as the financial sector works to steady itself after suffering massive losses from deteriorating debt.