Wall St. cuts perks with writedowns, layoffs

"The usual pattern is to accelerate layoffs and cut operating costs as much as they can," said Roy Smith, a professor of entrepreneurship and finance at the Stern School of Business and a former partner at Goldman Sachs. Banks followed this protocol in 1987, 1990-91, 1994, 1998 and 2000-2002, he said.

The question remains whether the cuts will end as the outlook for Wall Street firms improves, with the AMEX Security Broker Dealer Index .XBD rising over 30 percent to 181 since its March 17 lows.

TIGHTENING THE BELT

Managers forced to make a choice prefer to cut comforts rather than personnel so that they are equipped to take advantage of any rebound in the markets.

Hence, at Credit Suisse (CSGN.VX: Quote, Profile, Research), some divisions have placed a strict $30 limit on meals ordered by traders working late, according to a person familiar with the matter. Employees can no longer choose dinner from any restaurant in town. Instead, all catering goes through online service SeamlessWeb, so that managers can better monitor food orders.

Gone are some employees' free personal cell phone bills: the firm now only subsidizes a portion. Car vouchers are history: traders must pay for rides with corporate cards.

Some divisions at Merrill Lynch (MER.N: Quote, Profile, Research), which recently posted its third straight quarterly loss, have pushed employees to the back of the airplane: they've eliminated first class and business class travel for all domestic flights, according to one equity trader familiar with the matter.

Spokespersons for Credit Suisse and Merrill said the changes were not implemented across each company, but by individual teams or divisions.

Even firms relatively unscathed by the credit crunch are slashing expenses. At JPMorgan (JPM.N: Quote, Profile, Research), which acquired Bear Stearns for a fire sale price in March, one bond trader said some employees must work later to be eligible for a car ride home, while others must stay at work for a specified time after ordering food on the company account.

A JPMorgan spokesperson declined to comment on the issue.