Wall Street is likely to cut bonuses this year by 15-20 percent and make significant layoffs, according to a report published Tuesday by compensation consulting firm Johnson Associates Inc.

The estimates in the report by Alan Johnson, closely watched by financial professionals, are less severe than Johnson projected earlier this year. 

But layoffs could be significant. Companies were forced to make quick decisions and cut red tape during the pandemic, and they have recognized fewer employees are needed to do certain jobs, Johnson said.

"Technology has shown us that we don't need as many people, don’t need as many management levels...and in many places there is going to be job insecurity," Johnson said.

But cutting headcount adds expenses for severance pay, and companies will not want to be perceived as cheap with the economy in recession and millions out of work, Johnson said.

For those still employed, incentive compensation will be under strict scrutiny as banks consider their own performance during the coronavirus crisis, and also the Black Lives Matter movement.

This scrutiny will extend to chief executives' compensation at public companies, Johnson wrote.

"With the impact of COVID-19 and recent focus on justice and equality, it will require a thoughtful analysis and balance of performance, competitive and societal priorities, and customer and employee expectations,” Johnson wrote. "This is not a year to be tone deaf."

The ratio between CEO and worker pay, which banks publish annually, will receive significant attention this year as advocates for greater equality bring mainstream focus to the figures, Johnson wrote.

"Most of America is trying to stay above water," Johnson said. "It's almost a political statement that you're going to make with senior management pay (and it is) going to be dissected by the public."