JPMorgan Chase Cutting About 10% of Staff

JPMorgan Chase is cutting about 10 percent of its investment banking staff as the credit crunch and slowdown in the economy bite into bank earnings, people familiar with the situation said on Thursday.

The company will likely cut staff in line with competitors such as Goldman Sachs Group , which is cutting 10 percent, the sources said.

On Thursday, JPMorgan let go at least six equity sales officials from its New York desk, according to one person familiar with the matter.

The bank declined comment. There have been earlier reports of job cuts at JPMorgan on this scale.

The company's investment bank has just under 31,000 employees, an increase of about 20 percent compared with the same quarter a year ago, according to a third-quarter regulatory filing.

JPMorgan took on about 6,000 staff from nearly insolvent Bear Stearns in March and has also added about 40,000 staff through its acquisition of failed thrift Washington Mutual, according to its third-quarter earnings statement.

The bank's total head count was 228,452 at the end of September.

JPMorgan is seen as one of the Wall Street survivors of the credit crunch. It has not had to make the severe write-downs on mortgage-related assets that other banks have reported because it has limited exposure to the riskier classes of mortgages, such as subprime loans.

But in recent calls with investors and analysts, Jamie Dimon, chief executive, has been warning investors about possible losses to come from the bank's exposure to consumer debt.

At a conference two weeks ago, Dimon said the wider economic downturn could be worse for banks like JPMorgan than the credit crisis that has restricted financial markets over the last year.

This is because the bank has about $250 billion of prime mortgages and home equity loans and the bank is beginning to see customers miss payments on these loans. It has announced a plan to renegotiate about $70 billion in mortgages over the next two years to help these customers.

The company's shares slipped 10 percent to $25.54 on Thursday.

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