Commerzbank is to dismiss an additional 200 City workers after stepping up its planned job cuts in London from 1,000 to 1,200.

In a grim week for City job security, the deeper than expected cuts were announced by the German bank in e-mails to all staff in its London office and in its takeover target Dresdner Kleinwort. The clock starts ticking on one of the City’s biggest single job-reduction plans today, when a 90-day consultation period officially begins.

Originally, Commerzbank expected to reduce the 3,000-strong London workforce across the two organisations by 1,000 when it announced the takeover in September.

Since then, the downturn in financial markets has intensified, although sources in the bank deny that this explained the additional cuts.

In an e-mail from the human resources department, staff were told to expect “a significant reduction” in employee numbers in the fixed-income division and in corporate finance.

The equity markets and commodities division is also being targeted, with cash equities and research facing some of the biggest cuts.

Staff in mergers and acquisitions were told to expect “a sizeable streamlining in employee numbers”, and few parts of the combined banks, including the back office, will be unscathed.

The only staff spared in the cuts are people in leveraged finance and structured finance, in which employee numbers are to remain broadly stable, the e-mail said.

City employers appear to be rushing out job-cut announcements for fear of being labelled unfeeling Scrooges if they leave it any closer to Christmas.

Nomura is planning up to 1,000 job losses across its own operations and in the European business of Lehman, which it bought from the administrators in September.

Credit Suisse confirmed yesterday that it would shed 5,300 jobs worldwide, with 650 of them in London.

Tens of thousands of City jobs have already gone in the past few months, with Citigroup, Royal Bank of Scotland, Morgan Stanley, Deutsche Bank and Merrill Lynch all cutting staff.

Thin trading volumes, a deal drought, a horror of leverage and the shunning of once fashionable business areas, such as structured credit, have left thousands of employees with nothing to do.

Even Goldman Sachs, considered one of the strongest players in wholesale financial services, has reduced its worldwide workforce by 3,300, including hundreds in London. The bank is forecast to reveal a $2 billion (£1.3 billion) fourth-quarter loss when it issues its report on December 16, an event that in happier times fired the starting pistol for the annual City bonus round. This year, bonuses in most investment banks will be drastically reduced, if paid at all.

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