The job loss news just seems to be getting worse - but it might not be as bad as it seems. True, tens of thousands of bankers have already be laid-off around the world, and many firms are planning their next round of job cuts, but the smart money is now thinking that we are moving into the next stage of the downturn where, instead of firms throwing staff overboard, they merely battoning down the hatches.

In terms of job losses, we are probably in the vortex. We have Bear / JPMorgan, Citi, and UBS in the middle of large culls. Morgan Stanley is said last week to have axed many of the 1,500 heads it seeks to cut in its latest round of redundancies, and Lehman Brothers is thought likely to start its latest round of 1,425 layoffs this week (most of which are said likely to come from the firm's US operations).

Now clearly there remain big concerns over the state of the global economy (mostly the US economy, of course), but, that said, the radical headcount reductions investment banks and their like have taken over the last few months have not really been related to a downturn in economic activity. It's been the credit crunch, with its knock-on affects on asset values and the ability of businesses generally to raise finance and undertake M&A deals, which has wreaked havoc in the financial markets - hitting revenues, obliterating profits, decimating balance sheets and taking a huge toll on global headcount.

But there are signs that the financial markets are back on the move. Incredible that it is, some (although relatively few) CDO deals are again getting done, private equity firms and hedge funds are successfully raising capital for new ventures, and global stocks have come off recent lows. And, although we may still go into recession (some say we are already in one), the general feeling is that it will not be as long or as deep as most originally feared - mostly as central banks, and more specifically the US Federal Reserve, have got their acts together. And sure, we might currently be in the midst of a bear rally, but the end of the financial world doesn't now seem quite so close.

That's not to say, of course, that financial markets firms won't continue to struggle for a while yet. 2008 is most certainly a write-off for many, and we are probably not looking for a significant pick up in business for at least 12 months. But, that said, firms are now better placed to weather the storm. Fixed costs (mostly headcount) is being got under control. Variable costs (mostly bonuses) won't be a drag on earnings this year (or probably next) as staff come to terms with the new realities, balance sheets are (or have been) rebuilt, and business units are being realigned to focus on more obvious revenue streams and the opportunities which will undoubtedly present themselves as we emerge from the current market turmoil.

So, although you may be stressed out worrying about the job axe, and it may be difficult to get up in the morning to go to work, if you survive the next few weeks, there's a strong chance that you won't lose your job this downturn. Of course, it will still be a hard slog, as there will be fewer staff around to do all those jobs. And the rewards this year in terms of bonuses will be scant. But now it's time to gets your heads down, focus on what needs to be done and deliver big time. And hopefully, in 18 months time, we may all be wondering what the fuss was about.

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