“On Wall Street, the burning question is not if, but when,” writes Patrick McGeehan in today’s New York Times.

“In an industry that was suffering through a long slump even before the Sept. 11 attack on the World Trade Center, another round of cost-cutting and layoffs is inevitable, analysts and recruiters said. But most firms are holding off, reluctant to make the cuts immediately for fear of seeming heartless.”

“Indeed, some big investment banks like Lehman Brothers are insisting that they will not dismiss people before the end of the year, choosing instead to dilute the pain by paying employees significantly smaller year-end bonuses and making stock and options a more important component of those shrunken pay packages. Something has to give because Lehman has increased its staff by 17 percent this year but has 10 percent less to pay them.”

“Morgan Stanley — where the staff has grown about 3 percent, to 62,000 workers — faces a similar problem. So far this year, the amount the firm has paid its employees or set aside to pay them at year-end is $8 billion, down $1.2 billion, or about $20,000 per employee, from the first nine months of last year.”

“A few firms, said Frank Fernandez, chief economist of the Securities Industry Association, might announce some job cuts as soon as this week. But the more common pattern on Wall Street is to start preparing senior investment bankers for their bonuses to be only 40 to 60 percent as big as they were last year.”

” ‘The overwhelming majority of C.E.O.’s will cut bonuses rather than fire people at this point,’ Mr. Fernandez said. ” ‘The last thing anybody wants to do right now is hand out pink slips.’ “

“But that does not mean that all layoffs have been postponed indefinitely. Several people inside or close to Wall Street firms said they had expected Bear, Stearns to announce job cuts in September as part of a yearlong cost-cutting campaign and that it was now weighing when it might be appropriate to proceed. A spokeswoman for Bear, Stearns, which is scheduled to report third-quarter earnings today, said yesterday that she could not confirm or deny those reports.”

“J. P. Morgan Chase was another firm that delayed laying off people over the last two weeks, but was preparing to press ahead this week, according to a person close to the firm. The company said in the early summer that it would cut about 3,000 more jobs on top of the 5,000 that were lost in the merger of J. P. Morgan and the Chase Manhattan Corporation. A spokeswoman declined to comment yesterday.”