Still, the elimination of 240 jobs at two home-lending units only seems to encourage Bear’s increasingly hysterical attempts at damage control, with the bank downplaying its response to the subprime blowback as just another event "in the normal course of business." For its sake, we hope not.

Here come the pink slips.

While rumors have been trickling in that the big investment banks might be gearing up for job cuts amid the current market turmoil, Bear Stearns became the first to pick up the ax, though it’s not yet wielding it at its investment banking unit. Still, in a move that could mark the start of a broader wave of layoffs across Wall Street, the bank has laid off some 240 employees at two home-lending units.

Encore Credit, based in Irvine, California, is eliminating 100 positions, and the Bear Stearns Residential Mortgage Corp. division in Scottsdale, Arizona, is reducing its workforce by 140, Bloomberg News reported.

"In the normal course of business Bear Stearns Residential Mortgage Corp. and Encore Credit evaluate market conditions and staffing levels in an effort to identify areas where we can eliminate redundancies and improve the efficiency of our operations," the New York-based firm said in an e-mailed statement today. "As a result we have made the decision to reduce our staffing levels and close two operation centers."

Bear Stearns is the nation’s 12th-largest home lender, according to Inside Mortgage Finance. The company, the fifth- biggest U.S. securities firm, ranks second after New York-based Lehman Brothers Holdings Inc. among U.S. sellers of mortgage bonds.

The pink slips come a little more than a month after two of the firm’s hedge funds blew up, ultimately costing Bear Stearns co-president Warren Spector his job.

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