JP Morgan Chase & Co could cut as many as 4,000 of its own employees worldwide as the bank prepares to take on staff from Bear Stearns Cos at the same time it deals with turmoil in financial markets, people familiar with the situation said on Tuesday.
In addition to roughly 2,000 JP Morgan employees who will be replaced by counterparts acquired through its takeover of Bear Stearns, the sources said that an additional 1,000 to 2,000 JPMorgan employees may lose their jobs because of the slowdown in investment banking activity and credit market crisis.
Final decisions dealing with specific employees have not been made, though JP Morgan is expected to decide on market-related cuts by early June, the sources said.
JP Morgan, which expects to complete its takeover of Bear Stearns around June 1, told investors on Monday the bank had made decisions on about 10,000 of Bear's nearly 14,000 employees.
Morgan Chief Executive Jamie Dimon told investors the bank had extended job offers to about 6,000 Bear staffers, leaving decisions still to be made on the remaining 3,500 Bear staffers. Most of these employees work in technology and operations, a person familiar with the matter said.
The sources also said that of 6,000 Bear staffers offered jobs, a little more than half are regarded as ‘and drops,’ meaning employees who can be lifted from businesses where JP Morgan is not strong, such as prime brokerage, clearing, energy trading and some investment banking coverage.