More than 20,000 people are forecast to lose their jobs on Wall Street as the credit crunch bites into business at financial institutions over the next two years.
New York's Independent Budget Office, a non-partisan agency which scrutinises the city's finances, estimates that profits on Wall Street fell by 80% during 2007 to $3.2bn - the lowest level since 1994.
In a report published this week, the office predicted that 12,600 job cuts this year, followed by 7,600 in 2009.
"The economic situation is particularly precarious," said Ronny Lowenstein, director of the publicly funded agency. "If the problems affecting Wall Street and housing worsen, the recession will be deeper and the fiscal pressures on the city will quickly mount."