Job Cuts Loom At Several Firms - Details

Financial Markets Cuts

All the talk of bonuses and games of hiring musical chairs has kind of distracted us from focusing on that big train coming down the tunnel - layoffs.

Yes, it looks like a number of firms are now starting to come to terms with the new reality (both economic and regulatory), and are intent on focusing on businesses that can feed into the bottom line and improve their return on equity.

Barclays

The London Evening Standard reports that Barclays CEO Bob Diamond confirmed earlier this week that, in order to increase the bank's return on equity to 13% by 2013, he plans to 'take out considerable running costs over the medium term', and admitted that this would involve job cuts and that 'there are no sacred cows'.

Diamond said that cost-cutting, which would involve laying-off underperforming staff, cutting back on travel and hiring consultants, would save around $800m this year, and $1.6bn annually by 2013.

JPMorgan

The Financial Times reports that JPMorgan has revealed that it started an initiative two years ago 'to slash the number of (its) trading platforms around the world, in a move that could save hundreds of millions of dollars and lead to the elimination or redeployment' of several hundred more jobs.

The newspaper quotes JPMorgan CEO Jes Staley, who confirmed at the bank's investor day this week that the firm had already halved the number of trading systems from 10 to 5, and planned to get that down to 2 by 2014.

Staley said that, when the project first started, the firm had 3,000 people manually inputting trades. That number had already been reduced to 1,700, and that 'the goal was to bring it down to zero'.

WestLB

The owners of state-controlled WestLB have now secured the backing of the German government to its long-awaited restructuring plan, which will now be submitted to the EU for sign-off.

The plan involves separating the bank into four key businesses - fixed income and corporate finance, transaction banking, project finance and group and service functions. These units will be prepared for sale or merged with other institutions. Job losses are ultimately thought likely.

Lloyds Banking Group

The firm has just shut its small 15-person equities unit, as the bank 'refocuses its investment banking division away from riskier activities'.

Standard Chartered Bank

Reuters reports that Standard Chartered has 'shuttered' its 10-person Hong Kong based Global Loans Trading unit, as it shifts its focus to client lending. Some of the unit may end up being transferred into the bank's loan syndication business.

Morgan Stanley-owned hedge fund FrontPoint Partners

The New York Post reports that, FrontPoint Partners, the hedge fund Morgan Stanley acquired for $450m in 2006 (and which the firm is now hoping to spin off), has been hit be around $500m in redemptions following the dismissal of a portfolio manager who was linked to an alleged insider trading scandal.

According to the newspaper, FrontPoint has already reduced headcount from 170 to 100 in recent months, and an additional 25 - 30 jobs could still be on the line.

Goldman Sachs

The Wall Street Journal reports that Goldman is in the process of winding down its London-based Global Macro Prop Trading unit. Some of the 8-person desk will be deployed within the firm, but others are said to be in talks with a variety of hedge funds about a possible move.

Goldman's decided to shut the desk in order to comply with the Volcker rule.

Have something to tell us about this article?

JefferiesAnd the Best Place to Work in the global financial markets 2018 is...