The European leveraged-finance industry is facing a wave of job cuts that could reduce team sizes by 20%, according to bankers in the sector.

About 30% of leveraged finance jobs in investment banks in Europe are thought to have disappeared in the past 18 months and even heads of successful leveraged-finance divisions say privately that they expect to reduce their teams by 10%-20% in the next quarter. They agree that no firm will be spared cuts, given the pressure to cut costs in investment banking.