Intensive cutbacks are expected to continue through 2005, as Mr. Dimon, 48 years old, sits in the bank's No. 2 spot; he holds the titles of president and chief operating officer. Next year, the former chief executive officer of Bank One is scheduled to take the CEO job at J.P. Morgan from William Harrison, who will retain the title of chairman.

That is also when investors will be looking for the bank to grow. Indeed, J.P. Morgan executives say they are already assessing potential takeover targets in the U.S. and overseas, although no big deals are expected soon.  Long known as a relentless cost-cutter, Mr. Dimon is using many of the same techniques he unleashed during his four-year stint at Bank One in Chicago and before that, when he was a top executive at Citigroup in the 1980s and 1990s. He refers to the process as "waste-cutting."

"Cost-cutting implies that you are chopping out something you really need," he said in an interview.  Whatever it is called, it is a massive undertaking at J.P. Morgan, mainly because of the company's sheer size. The bank has approximately $1.1 trillion in assets and operates in more than 50 countries. It has a market value of nearly $140 billion and 175,000 employees. It had $1.4 billion in net income for the quarter ended Sept. 30, which was the first reporting period that included Bank One's results. Next week it will announce earnings for the final three months of 2004.

"We are moving at light-speed to get all this stuff done," Mr. Dimon said of the process. The bank originally said the Bank One deal would result in $2.2 billion in cost savings over three years, but has since raised that estimate to $3 billion. That includes an estimated $400 million in cost savings for 2004. [pagebreak]

His quick action has caused plenty of consternation among J.P. Morgan's bankers. Just days after J.P. Morgan completed the Bank One deal in July, a rumor circulated that Mr. Dimon was so fixated on slashing costs that he spent one evening grilling the limousine drivers who were lined up in front of the bank's Manhattan headquarters. According to bankers who heard the story, Mr. Dimon supposedly took down names of any bankers who were violating company policy that banned such perks unless a banker was leaving the office late, headed to the airport or riding with a client.

Eventually, Mr. Dimon was asked about the tale at a meeting with J.P. Morgan's investment bankers. He insisted it never happened, dismissing it as confusion with a similar episode years ago when he was at Citigroup and trying to tame big spenders there.

There are plenty of areas ripe for cutting that aren't related to the Bank One deal, in part because J.P. Morgan never really concentrated on the issue while it was making a string of big and expensive acquisitions in the past decade. Among them: the purchases of Chase Manhattan Corp. in 2000, Chemical Banking Corp., in 1996 and smaller investment banks like Hambrecht & Quist, Beacon Group and Britain's Robert Fleming.

"I was working on doing a better job of [cutting costs] myself, but he does it better than I do," says Mr. Harrison of his second-in-command. Both executives deny widespread speculation that Mr. Dimon will take the CEO job ahead of schedule.

Some of the recent cuts have been relatively easy. Shortly after arriving at the combined bank last summer, Mr. Dimon issued an edict to take back thousands of cellphones and pagers that had been distributed to bank employees. The staffers were told to use their own equipment and then seek reimbursement for any business-related expenses.

Another action targeted secretaries and other staff members working out of the bank's New York offices. For years, the New York workers had operated on a 35-hour workweek, while their counterparts around the country worked a 40-hour week. Shortly after the Bank One deal was completed in July, the New York staff received a one-time cash payment based on salary and was put on a 40-hour-a-week schedule.[pagebreak]

J.P. Morgan also recently overhauled its health-care plan; the employees who earn the most at the bank now are required to pay a larger premium. Anyone wanting to take a continuing-education course must go through a more-rigorous process to show it is job-related. And the bank has stopped matching charitable donations made by employees with a base salary of more than $150,000 a year. (The company has waived those rules for donations made to help tsunami relief efforts).   Other decisions have been more complicated. In 2002, J.P. Morgan decided to outsource some technology functions to International Business Machines Corp. in a seven-year deal valued at about $5 billion.

Mr. Dimon has long believed that a company should control its own technology and Bank One had invested more than $1 billion in technology, including new facilities with capacity for future growth.  "This could have been ripe for a battle," Mr. Dimon said of the issue. After considering several options, Mr. Harrison says he agreed that the bank would be better off managing its own technology. In September, the bank announced it would bring the work back in-house; Mr. Dimon has said the move wasn't about saving money.  So far, the moves are sitting well with investors, although shares of J.P. Morgan are valued less richly these days than some other big banks and Wall Street firms. At $37.99 in 4 p.m. New York Stock Exchange composite trading yesterday, shares of J.P. Morgan are trading at a multiple of 11.7 times 2005 earnings estimated by Thomson First Call. By comparison, Wells Fargo & Co. is trading at a 13.5 multiple and Morgan Stanley is trading at a 12.2 multiple.[pagebreak]

The cost-cutting is "a monumental task and it's the one variable that [Mr. Dimon] can control the most," says Thomas Finucane, a portfolio manager at John Hancock Funds, a unit of Manulife Financial Corp.  Mr. Dimon received widespread credit for his cost-cutting at Bank One, which stumbled in the late 1990s after a series of acquisitions. Upon his arrival in Chicago in 2000, he recommended employees read one of four business books -- including one called "Double your profits: 78 ways to cut costs, increase sales, and dramatically improve your bottom line in six months or less."

He also implemented a series of intensive cost-saving moves, like selling four of the bank's six corporate jets and shutting down its money-losing auto-leasing business. He overhauled the bank's budget system so that each branch was responsible for its own profits or losses and shuttered its flopped Internet venture. Bank One earned $3.5 billion in 2003 compared with a loss of $511 million in 2000, the year he took over in the top job.