(April 4 – 12:15 ET) – Apparently, the company name isn’t the only item getting trimmed at Morgan Stanley Dean Witter & Co.

According to the Wall Street Journal, MSDW is considering layoffs for as many as 1,000 brokers, or 7% of its brokerage force.

The story in today’s paper says the firm is looking to slash nearly US$1 billion in costs, citing a person familiar with the matter. There is speculation that total job cuts could reach 1,500, with reductions in support staff, investment banking, trading and research. Morgan Stanley has 14,000 brokers, making it the third-largest securities firm in the United States.

Brett Galloway, a Morgan Stanley spokesman, declined to comment. The firm has said that staffing cutbacks are likely to be made on a business-by-business basis, and wouldn’t be made across the board. As for broker cuts, a person at the firm says support staff will likely be included in the layoffs, reducing the number of brokers that will have to leave.

If the report is true, it will mark a significant move in that retail brokers are usually the last to go. The thinking is that they continue to produce even in tight markets, unlike investment bankers that face an utter lack of work.

“Many large Wall Street firms have been hesitant to announce large-scale layoffs of revenue-producers this year for fear that they will be short-staffed if the markets recover,” says the WSJ.”The Morgan move marks a turnabout … Morgan is making the bet that it can build its client base with fewer brokers.” Laying off retail brokers also suggests that the firm believes that the recent market downturn will persist.

According to the WSJ, analysts say that the small cuts are starting to add up and that it is only a matter of time before firms launch larger reductions in their work force, particularly if the markets continue to slide and business conditions deteriorate. “Despite what the Wall Street firms are saying, layoffs are the rule — not the exception,” says Amy Butte, a securities industry analyst for Bear Stearns Cos.