Lehman Brothers (LEH) is swinging the ax. Lehman shares fell after CNBC reported the big investment bank will cut 5% of its workforce, or about 1,400 jobs. The news comes as Lehman prepares to report first-quarter results next Tuesday. Wall Street has been bracing for a round of bad news next week from banks including Lehman, Goldman Sachs (GS) and Bear Stearns (BSC), amid a sharp slowdown in dealmaking and a fearful turn in the credit markets. At Lehman, analysts expect first-quarter earnings to fall by more than half, to 91 cents a share from $1.96 a year ago. A particular area of concern at Lehman is the bank’s big commercial real estate loan book, which is expected to see a big writedown as property values decline. With revenue under pressure, Lehman is responding by cutting costs, in a painful process that will no doubt be repeated many times over on Wall Street in the next few months.

Nortel (NT) is cutting back again. The Toronto-based telecom equipment company said it will cut 2,100 jobs from its 33,000-member workforce, while moving an added 1,000 jobs overseas in its latest bid to reduce costs. The move comes as the company posted a steep fourth-quarter loss and a 4% drop in revenue from year-ago levels, as North American telcos pull back on their network spending. Nortel lost $844 million, or $1.70 a share, for the quarter ended Dec. 31, compared with a year-ago loss of $80 million, or 19 cents a share. That latest quarter was hit by Nortel’s decision to reduce the value of its deferred tax assets - losses that can be carried forward to be applied to cut taxes on future profits - by $1 billion. The company cited “changes in Canadian tax profile” for that move.

“Our ultimate goal is to build a high-performance, efficient and simple organization within a cost structure that allows us to compete and win effectively against any competitor in the world,” said CEO Mike Zafirovski. To that end, Nortel has now cut 5,000 jobs over the past year, and has announced cutbacks in each of the past four years. But like rival Alcatel-Lucent (ALU), Nortel appears to be rapidly losing ground as big customers such as AT&T (T) and Verizon (VZ) emphasize investments in newer technologies that give consumers access to phone, Internet and television service over one line. That’s why the company is reportedly discussing a joint venture with Motorola (MOT) that could give it more scale to compete with bigger rivals. Wednesday’s numbers say Nortel needs to do something, and fast.

Ann Taylor (ANN) became the latest retailer to cut back its growth plans amid signs that the economy is slowing. The New York-based fashion retailer said it will close 117 stores over three years and cut 180 headquarters jobs in a strategic restructuring aimed at helping the company return to a growth track. Ann Taylor said it will open fewer Ann Taylor and Ann Taylor Loft stores this year and delay rolling out its unnamed new retail concept, which had been set to open this fall, till next year.

Aside from charges tied to the firings and store closings, Ann Taylor said it remains comfortable with its fiscal 2007 earnings estimates. “In all, the plans we are pursuing are designed to enable us to weather the expected downturn in 2008,” said CEO Kay Krill, “while positioning the company for aggressively pursuing growth as the economy recovers.” That’s corporate-speak for battening down the hatches.

McGraw-Hill (MHP), owner of Standard & Poor’s and Business Week, said Tuesday it has cut 3% of its staff in a move to hold down costs. The New York-based business and educational publisher said its restructuring plan resulted in 600 fourth-quarter layoffs, half of them at McGraw-Hill Education. “Reducing staff is never an easy decision,” the company says, though it hastens to add the deal will “fortify the corporation’s long-term growth prospects.”

McGraw-Hill goes on to note that the global economy has three critical needs, including “the need for information transparency.” Fair enough. Yet in the same breath, McGraw-Hill lapses into obfuscating flack-speak. Its press release attributes the business publishing group layoffs, for instance, to the “reallocation of certain resources to support continued digital-evolution and productivity initiatives,” and blames the education group firings on “steps to centralize certain management functions and to better leverage outsourcing opportunities.” If this is information transparency, we’ll take a pass.

National City (NCC) keeps trying to dig its way out of the mortgage mess. The Cleveland-based bank announced another round of layoffs Wednesday and said it will cut its quarterly dividend in half. National City also said it will raise capital for the second time in six months as the bank seeks to build up its cushion for rising loan losses. Including Wednesday’s announced plan to cut 900 mortgage unit jobs, National City has reduced its workforce by 3,400 positions since Sept. 30 - an 11 percent cut, going by CNNMoney.com figures.

“Getting from where we started earlier this year to where we need to be by year end is not pleasant or fun, to be sure,” CEO Peter Raskind noted on a conference call back in October. That’s an understatement, but at least Raskind seems to be living in the same world as the rest of us.

The same couldn’t be said for his predecessor David Daberko, who told Reuters in April that “we would expect to be in the black in future quarters” in mortgage banking. Instead, National City’s mortgage operations have been losing money, leading to the hefty job cuts. Daberko was right in one respect about mortgage banking, though. While the business itself isn’t in the black, the outlook could hardly be darker.