Several stockbroking firms are cutting staff, not replacing those who leave or freezing recruitment due to sharply lower business volumes, particularly in the private client area. The cuts are mainly on share-dealing execution desks and back office services and not in portfolio management and advisory areas, according to one source.

"Most of the firms are in the same boat. We all set up big execution desks when retail business was strong. Now commission income is being hit by both the fall in business volumes and the drop in share prices, so we have to cut costs. As well, wage inflation in the financial services area is running at 30-40 per cent and competitive pressures in the market and the arrival of execution-only online services have softened commission rates," the source said.

At Dolmen Butler Briscoe, nine staff have lost their jobs and most of the 71 remaining at the stockbroking division have agreed to take 10 days' unpaid leave before the end of December. Joint managing director Mr Paul McGowan said the cutbacks mirror what has happened internationally as brokers adapt to much lower volumes of business in weak stock markets.

Dolmen's cuts include closing its Glasgow office and possibly its London office. Mr McGowan said business volumes started to fall from about May 2000 after the Nasdaq bubble burst. He reported some recovery this year but said figures were still disappointing. Dolmen has cut costs in order to achieve its internal targets for the year, it said, but it had had plans to expand the business.

Goodbody Stockbrokers, estimated to have about 40 per cent of the private client market, said trading volumes started to fall gradually from about July last year and are now about 50 per cent down over the year. A hundred people are employed in this section of the firm compared with 117 people a year ago - the reduction was made by not replacing those who left.

"Business volumes started to fall gradually. We have dealt with it by freezing recruitment, managing the Eircom and Vodafone dealing services within existing capacity and redeploying staff to new business initiatives," said Mr Eamon Glancy.

At Davy Stockbrokers, the head of private clients, Mr Brian McKiernan, said business volumes were down "by a small margin" on the first seven months of last year. "Nobody has gone and we have no plans to let anyone go... We are still profitable at current levels of business and still building the business for the long term," he said.

With 138 employees in the private client business and a market share of about 40 per cent, Mr McKiernan said Davy was "used to the humps and hollows in the market".

NCB Stockbrokers said it has not made anyone redundant in its private client division but said trading volumes were significantly down. "We resisted the temptation to gear up significantly during the technology-led boom and we have continued to broaden our product range," chief operating officer Mr John Kielty said.