Merrill Lynch, after its first losing quarter in nearly nine years, chopped five percent of its workforce. Many others are expected to follow.
"Oh, I think it's just beginning," said George Mauze of the job placement firm Lee Hecht Harrison.
Mauze expects to be very busy. "My experience would say that it's gonna be much broader than it ever has been. Usually things happen one sector at a time. But I think you're gonna see it pretty much across the board."
What other firms are likely to see cuts?
Bankers Trust and Salomon Smith Barney are said to be considering sweeping layoffs soon.
"Fifteen to twenty-five thousand could fall from the rolls over the next six months," said Dean Eberling, a security analyst.
And when Wall Street suffers, so does New York City. Financial firms employ only five percent of the city's workforce, but they pay 17 percent of its wages with an average salary of $170,000 and $12 billion in bonuses last year alone.
"When you are laying off people who make $170,000 that has a big impact on the economy," said state Comptroller Carl McCall.
McCall fears the city did not learn its lesson after the 1987 crash.
"It looked like everything was rosy. And the dependence on Wall Street was not as great as it is now. And yet we had a serious recession. And one that was very harmful to us," said McCall.
The impact is already rippling through the city's economy from restaurants to real estate.
Bankers and brokers are among the few who could afford a 1300-square-foot apartment on Central Park.
Now the price of such an apartment is falling. "Ten days ago it was $925,000. Today, ten days later, it's $850,000," says realtor Barbara Corcoran.
The cause of the falling prices is the same uncertainty that threatens to spoil Wall Street's party.
In the words of one retail broker, "I think you have to be insane not to be concerned."
The Wall Street party is over for 3,400 people at Merrill Lynch. Now Wall Street is wondering who will be next?
Reported By Anthony Mason