When Morgan Stanley CEO John Mack indicated in April that he felt that his firm's then current round of job cuts would likely be the last this year, most wrote this off as a mere exercise in internal propaganda, designed to keep up the morale of Morgan Stanley's under-pressure employees. Well, it now looks like Mack might have called it right after all.

The Wall Street firm has culled around 5,000 bankers this year, and is said to have saved around $1bn in the process. And Reuters has reported that Morgan Stanley is now out in the market busy exploiting the uncertainty prevalent at some of its rival firms by snapping up key and strategic hires. The news agency says that Morgan Stanley has now earmarked a significant amount of the $1bn saved for salary, bonus and hiring costs for new recruits, and quotes firm spokeswoman Jeanmarie McFadden, who said last week: 'We feel that right now, for these markets, we are right-sized'. Although this is clearly not a guarantee that there will be no more headcount reductions at Morgan Stanley this year, it is significant that the firm feels confident to come out with this fairly positive comment, especially at a time when many of their rivals are still busy cutting heads.

And on the subject of job cuts, Financial News reports that, according to a new report prepared by City of London Corporation, 75,000 jobs will go in the financial services sector in Europe between 2007 and 2009.

Finally, Reuters reports that Wall Street appears to be getting more down-in-the-mouth each day on the subject of bonuses. Only last week, the smart money was saying that bonuses were likely to be down on average some 25%. With continuing pressure on revenues, worries about commodity prices and no end in sight to the credit crisis, however, the doom-sayers are now predicting that Wall Street bonuses will fall between 30- 40% this year on average. In the meantime, The Daily Telegraph reports that City bankers are now coming to terms with the idea of bonus cuts of between 30 - 50% on last year. And many are reconciled to getting a 'doughnut' - a big fat zero.

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