Last week, news leaked that JPMorgan Chase is laying off or reassigning 1,000 people in its mortgage division.

It’s a simple matter of what comes up, must come down. With capital markets revenue plunging, more job cuts are inevitable, Wall Street insiders tell CNBC.

In the past two years, COVID stimulus spending caused a hiring binge at major U.S. investment banks, whose ranks swelled, from analysts to richly paid rainmakers. Morgan Stanley, Goldman Sachs and JPMorgan, expanded their head count in the past two years by 26%, 17% and 13%, respectively.

The boom was continuing up until as recently as six months ago. Now that the stock and bond markets are plummeting, capital markets, initial public offerings (IPOs) and mergers and acquisitions (M&As) have all dried up, as well.

“When banks have a revenue problem, they’re left with one way to respond: Ripping out costs,” says one Wall Street head hunter.

“I can’t see a situation where banks don’t do RIFs [reductions in force] in the second half of the year,” David McCormick, CEO of DMC Partners recruitment firm says, of the pending bust.

IPOs are down a staggering 91% this year, according to Dealogic data. This has caused equity and debt capital market revenues to dive by 71%.

JPMorgan Chase President David Pinto says the bank will report a 45% decline in the bank's fees in the second quarter, describing the overall situation for the investment banking industry as a “very, very challenging environment.”

Thus far, JPMorgan Chase has been the only major Wall Street firm where layoff news has leaked. Insiders say it is only a matter of time before other, major slashes occur.

“Business has dropped off,” one financial industry insider says. “I wouldn’t be surprised if there was some type of headcount reduction exercise in the October-November time frame.”

Reports are also surfacing that major banks that tolerated or even encouraged employees to work from home during the COVID-19 lockdowns are returning to their strict work ethos.

As McCormack puts it: “Banks have been very clear about trying to get people back to work. If you aren’t stellar and you are continuing to work from home, you are definitely most at risk.”