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The days of Canadian financial services firms going on hiring binges are long gone, but unlike in the U.S., major layoffs aren't looming.

Officials at the Investment Industry Association of Canada expect firms to continue hiring this year, though not as robustly as they have in the past, says Executive Director Ian C.W. Russell. Many companies are also reluctant to let go employees, especially those who've received a large investment in training for highly specialized jobs.

Russell's comments have been echoed by Toronto-based recruiters, who've said for weeks they've not noticed any slow down in hiring by their clients. However, Canadian financial companies are facing some of the same pressures as their U.S. counterparts, which may have an impact on their hiring plans.

"There is a definite trickle effect north of the border," says Bill Vlaad of Vlaad and Co. Inc. of Toronto, a recruiting firm specializing in financial services companies. He believes more layoffs are coming this year. "Our financial services firms are closely tied with international markets, such as the U.S.," he notes.

At CIBC, Write-Downs and Staff Cuts

Perhaps no company illustrates that more than the Canadian Imperial Bank of Commerce (CIBC) which has the biggest exposure of any Canadian bank to the U.S. sub-prime mortgage market. In May, the firm announced plans to eliminate 100 positions at its CIBC World Markets business, reducing staff at the unit by 15 percent over the course of the year. In 2007, CIBC sold its U.S.-based investment banking and equities business to Oppenheimer & Co.

"We estimate that CIBC will incur an additional $1.5 to $1.9 billion (Canadian) in charges in the third quarter,” writes John Aiken, an analyst with Dundee Securities in Toronto, in a note to clients. “However, there is no guarantee that this will be the end and our estimates may not be conservative enough, given the additional pressure that the U.S. financial system still faces."

CIBC, which employs about 40,000 people around the world, is in a cost-cutting mode, as it restructures World Markets into what it calls a "leading" Canadian investment bank. Expenses fell 9.5 percent in the second quarter to $1.79 billion, due to lower compensation-related expenses, according to CIBC's latest earnings release. The company also says it's placing "additional emphasis" on strengthening its balance sheet given current market conditions.

Canadian Firms Didn't Over-Staff As Much As U.S. Firms

Like their counterparts on Wall Street, Canadian firms expanded during the bull market of the 1990s. Further fueling their growth was the strength of the country's energy and mining sectors, which some expect will help Canada avoid a recession. The industry also has invested money in technology to make it more efficient.

"Markets are not great but it's not a disaster," Russell says. "When times are tough (banks) are really reluctant to let people go. We have noticed that over the past couple of cycles."

However, Vlaad disputes that notion, arguing businesses look at the costs they'll incur in the future from items such as training rather than the "sunk costs" they have already spent. Still, he believes job cuts in Canada will pale in comparison to what's happened in the U.S. because Canadian firms took a more conservative approach to hiring.

"The banks are not done," he says, adding future job cuts will likely not be large "front-page" announcements that will capture the media's attention.