By Saeed Azhar

NEW YORK (Reuters) - U.S. investment banks are poised to cut more jobs if economic uncertainty continues to weigh on dealmaking in the months ahead, according to analysts and recruiters.

U.S. President Donald Trump's threats to impose tariffs on trading partners have roiled markets, weighed on capital markets activity and raised the risk of an economic slowdown. The turmoil has taken some of the shine off Wall Street expectations that deals would pick up this year under a business-friendly administration.

Wall Street banks including JPMorgan and Bank of America have already begun annual culls targeting underperforming employees, while Goldman Sachs and Morgan Stanley are planning to lay off staff in the coming weeks.

If deals do not recover in the coming months, other major banks and boutiques will be forced to reevaluate their workforces, analysts and recruiters warned.

"There's an expectation that investment banking pickup is delayed, not dead," said Mike Mayo, a banking analyst at Wells Fargo. "But if we're having this discussion in the middle of the summer, that could be a different story. If the revenues aren't coming in, then employees bear the brunt."

Larger banks are quicker to reduce headcount, while boutiques could follow later, said Chris Connors, principal of Johnson Associates, a compensation consultant.

"If the pipeline does not materialize quickly, then they’ll make moves to reduce staffing levels," he said.

Global investment banking fees fell 6.3% to $16.83 billion in the period from January 1 to March 13, versus $17.96 billion a year earlier, preliminary data from Dealogic showed. The plunge is even sharper compared with the fourth quarter, when fees reached $19.96 billion as dealmaking rebounded.

U.S. equity offerings have also slowed this year, with issuance reaching $57 billion as of March 19, sliding from about $69 billion during the same period last year.

Uncertain outlook

An uncertain economic outlook has weighed on executives' confidence that their companies' stocks can perform in the critical quarters after an initial public offering, bankers said.

Bonuses at Wall Street banks rose for last year as activity rebounded, but they could be at risk for 2025, analysts said.

For example, Bank of America's bonus pool for investment bankers rose an average 10% for 2024, Reuters reported in January. Bank CEOs were also awarded pay bumps as dealmaking rebounded.

Goldman Sachs CEO David Solomon's compensation rose 26% to $39 million for last year, according to a filing.