Despite a bull economy that seems never to die, banks and insurance companies have sloughed off more than 35,000 jobs this year.

More cuts are on the way. Chase Manhattan Corp.'s acquisition of J.P. Morgan & Co. could result in the elimination of several thousand jobs, analysts said, especially in the capital markets groups where the companies have the most overlap.

Executives from both companies won't talk about specific numbers, but Chase chairman William B. Harrison Jr., who will be president and chief executive at the combined J.P. Morgan Chase & Co., said Wednesday that the company expected about $500 million of the merger cost savings to come from job cuts.

Dylan Roberts, director at New York-based Oliver Wyman & Co., estimated that a 10% to 15% reduction in jobs would likely be "in the ballpark." That would be about 9,000 to 13,000 jobs at the combined company.

This year's pace of layoffs is hardly a record - indeed, 54,190 bankers lost their jobs by the end of the early-1990s recession, when hundreds of banks and thrifts foundered.

Employment consultants said a recent spate of layoff announcements is symptomatic of an industry in turmoil. Bank of America Corp. is in the process of axing 10,000 positions. First Union Corp. will cut as many as 5,291. Bank One Corp. plans to cut 5,100.

"Borders are being broken down between different kinds of financial services companies," says John A. Challenger of the Chicago-based outplacement firm Challenger, Gray & Christmas. And that leads to competitive pressures and a reallocation of resources.

At the same time, "there's a growing number of mergers and acquisitions. That kind of activity looks like it's going to pick up in the second half of this year, which means job cuts in the headquarters operations at the very least," Mr. Challenger said.

Jobs have been slashed in the insurance industry as well. Conseco Inc., the beleaguered Carmel, Ind.-based company, said in July that it would eliminate 2,000 jobs and get out of certain businesses, including its subprime automobile lending portfolio and its asset-based lending operation.

The latest round of job cutting comes as banking and insurance companies scale back from failed ventures into new businesses and as companies try to cut more fat out of ongoing operations.

For example, First Union's venture into subprime consumer loans with the 1998 purchase of Sacramento, Calif.-based The Money Store turned out to be nothing more than a major headache. More than 2,300 of the jobs eliminated at First Union this year will be from that unit, which is being shut down.

Bank of America is scaling back the ranks of middle and senior managers that had grown bloated through years of acquisitions. Certainly Bank of America feels it did not cut deeply enough after its 1998 merger with NationsBank Corp. The company lopped off 25,000 jobs as a result of that deal, when it originally expected to lose a mere 5,000 to 8,000.

Indeed, some firms are finding that a second swipe at cost cutting - even a year after an acquisition closes - is exceedingly beneficial. Michael Mayo, an analyst with Credit Suisse First Boston, said banks have a history of "getting too bloated in times of economic expansion.

Everyone knows a downturn will occur," Mr. Mayo said. "Large banks want to be in a competitive position. It's very healthy that banks are looking to tighten their belts now as a matter of choice rather than being forced into it. It can be done in a thoughtful way."

Bank of America spokesman Robert Stickler said the decision to take out even more costs was motivated by a strategic planning review that took place in the late spring. "We looked at the business lines that would give us the most growth and found there was a mismatch between where we employed some of our resources and where our growth opportunities were.

"We were able to come up with $500 million or $600 million to invest" and a majority of that money came from the job reductions, the spokesman said. Bank of America plans to spend part of those funds on technology, including deals with Internet firms.

The banking industry "is particularly susceptible to the impact of e-commerce," said Mr. Challenger, the outplacement executive. "There's the long-term recognition that e-commerce is going to have an extraordinary impact on how business is done but that it's also going to take time."

Yet with all the churning in financial services hiring and firing, staffing levels are higher in the industry than they were ten years ago, despite that there are one-third fewer banks than there were in 1990. Keith Leggett, a senior economist at the American Bankers Association, says that is because the total number of bank branches has been growing steadily over the past decade.

"Twenty years ago, people thought electronics were going to replace branches. But what we've realized is that people bank more than they used to. They visit branches and they use electronics. And the more branches you have, the more people you need to staff them."

Even though many financial services companies have announced outsize layoffs this year, "these downsizings are not necessarily a bad thing," he says. "The market is so dynamic that many people will end up back in the banking industry, working in community banks. There's this tremendous demand out there."

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