Should Wall Street brace for job cuts? This is supposedly the worst credit crunch in two decades. Repackaging mortgages, in fact the entire structured credit business, has been all but shut for three months. And the private equity business seems to be on an extended break, too. Thus far, the slowdown hasn’t translated into much in the way of cutbacks.

True, UBS is culling 1,500 from its fixed-income division after taking some $4 billion (Rs15,900 crore) in write-downs. But the Swiss bank is the exception. Rivals like Bear Stearns, Credit Suisse, Lehman Brothers and Morgan Stanley have mostly just trimmed their mortgage teams. Or they have sacrificed a head honcho or two. Bear ditched its second-in-command, Warren Spector, in August. And Merrill Lynch ousted its head of fixed income, Osman Semerci this week.

These more surgical strikes might be enough to appease investors if the summer turmoil turns out to be an aberration. But if market woes persist, Wall Street will have to take more drastic measures.

A fifth of New York City’s financial workforce got the boot in the two years after the 2001 downturn, according to the Securities Industry and Financial Markets Association. Similar bloodshed now would mean pink slips for 40,000 Big Apple financiers.