NEW YORK (CNN/Money) - Lehman Bros. may be forced to cut 600-1,200 jobs, or 5-10 percent of its staff, as it grapples with a sudden drop in revenue and continued pressure on the investment banking sector, a newspaper reported Monday.

Analysts based estimates of potential job cuts at Lehman - so far the only Wall Street firm to avoid layoffs - to a recent decline in corporate bond offerings, the Wall Street Journal reported.

Senior Lehman (LEH: Research, Estimates) executive Brad Jack could not be reached for comment by the paper; the firm is in a quiet period leading up to its fiscal third-quarter earnings report due Tuesday. However, Jack told institutional investors earlier this month that Wall Street's entire banking sector could be forced to cut 10-15 percent of its staff. That includes some of the 1,900 who work in Lehman's global investment-banking department, if market conditions persist, the Journal reported.

A decision by Lehman to cut jobs would send a clear signal that investment firms are not yet out of the woods. Wall Street firms, which have so far slashed 32,287 employees, or 8.8 percent of the workforce, since the end of 2000, are expected to initiate a third or fourth round of layoffs, according to the report.

Wall Street could roll back staff by another 5-10 percent, mostly before November, Salomon Smith Barney securities industry analyst Guy Moszkowski told the Journal.

So far, Merrill Lynch & Co. has let 17,400 people go, about a quarter of its staff, since the end of 2000. Charles Schwab Corp. is planning to cut another 1,900, bringing its total cuts since 2000 to 9,100, or 35 percent of its staff.

But Lehman has until now been able to avoid such tactics as it expanded in mergers and acquisitions, stock advice and research, and reduced its dependence on trading and underwriting revenue from debt markets in the last few years, the Journal reported.

Lehman's workforce has increased 43 percent since 1999 to about 13,090 at the end of 2001.

But now, Lehman is feeling the pressure from a sluggish environment. Its stock is down about 19 percent in the past month and it has been scrambling for ways to avoid layoffs such as cutting off such perks as first class airline tickets.

On Tuesday, Lehman is expected to take a $50 million to $70 million writedown because of two investments in its private-equity portfolio, Goldman Sachs analyst Richard Strauss told the Journal

Analysts surveyed by earnings tracker First Call now expect Lehman to earn 87 cents a share, down from $1.14 a share a year earlier.

Lehman's stock is down about 19% in the past month, more than its rivals', which have fallen, on average, about 14% in the same period. This is far from 2001, when Lehman lost 1.2% and the Dow Jones Investment Services group fell 24.3%.