Banks planning more job cuts

INVESTMENT banks, which are some of London's biggest employers, are sharpening their knives again. Deutsche Bank is among those looking for savings. It is considering laying off thousands around the world as new chief executive Josef Ackerman battles to cut costs by £1.3bn a year. Deutsche has already announced 10,000 job cuts in the past year, including 1,000 last month.

Rival UBS Warburg announced a further 200 City job cuts last week. Schroder Salomon Smith Barney, part of Citigroup, is also considering significant lay-offs. 'Given the market realities, we are continuing to make targeted reductions throughout the organisation,' it said.

The banks are suffering from a shortage of floats and takeover deals, their most lucrative pursuits. Both markets collapsed last year, leading to the loss of more than 20,000 City jobs. A tentative recovery has begun in the past month, but it remains at the mercy of market confidence.

Banks try to keep expenses at a certain ratio to revenues. Wages, including the infamous year-end bonuses, are their biggest cost. Unusually, this time the knife is being taken to senior staff, including directors and managing directors. ' Getting rid of one guy who is paid £10m a year is the same as getting rid of 30 junior guys,' said one source at a City bank considering cuts.

Some workers are beating their employers to the punch by lining up for voluntary redundancy. Staff at one Asian investment bank report that more than 100 applied for redundancy. All but two negotiated exit packages.