Morgan Stanley axes 2,000

Morgan Stanley, the investment bank, raised fears of further job cuts in the City yesterday as it began the process of shedding 2,000 roles from its 60,000-strong global workforce.

The cuts, which are hitting Wall Street hardest, came the day after the Guardian revealed that Morgan Stanley's US strategists had advised investors to withdraw their money from heavily unionised industries.

That drew an angry response from Roger Lyons, general secretary of Amicus, the UK's largest private sector union. He told BBC Radio 4's World at One: "It is clear that Morgan Stanley is giving this advice based on prejudice and not on fact. This is very bad news for investment advice."

In response to the research note published last week, Morgan Stanley said that it "has recommended, now recommends and likely will continue to recommend investments in strongly-unionised companies".

Morgan Stanley would not comment on any job cuts yesterday. City sources said, however, that bankers at the London head office in Canary Wharf were among those shown the door yesterday, as the firm continued its plan to lose 2,000 jobs by the end of the year. Once these cuts are completed, Morgan Stanley will have reduced its total headcount by as much as 15% from its peak during the dotcom boom.

Morgan Stanley employs around 4,500 people in the City, which has escaped relatively unscathed from this latest round of cost cutting redundancies.

Other firms preparing to sack operatives include South African-run Gerrard, where as many as 200 roles are on the line. Dutch banks ING and ABN are also making cuts, although ABN is losing around 2,000 employees as a result of an outsourcing arrangement with EDS.