Top Firm Said Finalizing Plans For Latest Downsizing

Here we go again.

Reuters reports that Nomura is finalising plans to cut hundreds of jobs, mainly in equities and investment banking, in an overhaul aimed at restoring its overseas operations to profitability, people with knowledge of the planning said.

The cost-cutting is said be part of a new strategic blueprint for Nomura mapped out by Koji Nagai, who took over as CEO this month and has promised to rebuild the investment bank from the 'ground up' after disappointing revenues and an insider trading scandal that forced the resignation of its top two executives.

The biggest cuts are likely to be made in Europe, mainly London, although they are thought to likely to impact the United States and Asia too.

Reuters reports that one analyst believes that the next round of cost-savings could target some $750m in expenses, in addition to the existing $1.2bn cost-drive.

The news agency also says that 'as part of the overhaul, Nomura is expected to accelerate the integration of electronic brokerage Instinet and the former trading platform of Lehman Brothers'.

Hit the link below to access the complete Reuters article:

Nomura to cut equities, investment banking in strategic reset

Here are four cautionary quotes which reflect the current mood on industry jobs:

'We’re at an inflection point. Some banks need to come out and say we need 30 percent to 50 percent fewer people. The hit has to be more severe than 1,000 people here and there. Second- or third-tier players have to get out of certain businesses and focus on niches - either products or geographies'.

Steve Hussey, a London-based financial-institutions analyst at AllianceBernstein

'The European crisis has developed closer toward our more grim scenario than our better-case scenario over the course of the past two years. Our prospects and our future view on profitability is different today than it was in 2010'.

Deutsche Bank co-CEO Anshu Jain said last month

'If you remember back in November of last year, I don’t think that even a pessimistic outlook for the next 12 months would tell you what we are living in right now. The environment has completely changed. We have been very proactive in accelerating taking down cost as we saw the new environment developing, and we will not be shy to continue to do so as we see the market changing, as I do believe that many of our competitors will have to do'.

UBS CEO Sergio Ermotti said last month

'As investment banks strip their businesses in the face of a poor economy, poor revenue and higher regulatory capital, it’s the survival of the very, very fittest. We could see just three to five global investment banks'.

Kevin Burrowes, U.K. Head of Financial Services at PricewaterhouseCoopers LLP

image: © C.P.Storm

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