700 ARE LAID OFF AT BOFA & BEAR
By RODDY BOYD
October 30, 2007 -- For Wall Street, Halloween is tilting heavily toward trick and away from treat as the bond departments of two brokerages announced layoffs yesterday.
Jimmy Cayne's Bear Stearns told employees that "approximately" 300 were being fired yesterday, while Banc of America Securities began letting go up to 400 as tumbling profits and expanding mortgage woes wreak havoc on their bottom lines.
In delivering the bad news about the cuts, the Bear memorandum was heavy with contemporary management buzzwords, noting, "We will continue to act prudently to rationalize our business, monitor staffing needs and align infrastructure with current market conditions."
A Bear spokesman declined comment beyond the layoff memo.
Although Bear cited the need to reduce costs in all product areas as being behind the layoffs, many were interpreting them as resulting from the massive drop-off in its crucial mortgage- and asset- backed securities trading and underwriting franchise.
Meanwhile, Banc of America Securities' layoffs yesterday were directed at the firm's struggling mortgage desk, where 45 to 50 traders and sales staff were cut.
The bank's corporate sales effort saw some firings as well. The investment-banking unit reported only $100 million in profit for the third quarter, a drop of over $1.3 billion.
In the wake of BofA Chief Executive Ken Lewis' blunt remarks last week - "I've had all the fun I can stand in investment banking right now," he said during a conference call to analysts - the likelihood of a layoff-driven retreat from trying to build a major investment bank has been seen as high.
A BofA spokesman declined comment.
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October 30, 2007 -- For Wall Street, Halloween is tilting heavily toward trick and away from treat as the bond departments of two brokerages announced layoffs yesterday.
Jimmy Cayne's Bear Stearns told employees that "approximately" 300 were being fired yesterday, while Banc of America Securities began letting go up to 400 as tumbling profits and expanding mortgage woes wreak havoc on their bottom lines.
In delivering the bad news about the cuts, the Bear memorandum was heavy with contemporary management buzzwords, noting, "We will continue to act prudently to rationalize our business, monitor staffing needs and align infrastructure with current market conditions."
A Bear spokesman declined comment beyond the layoff memo.
Although Bear cited the need to reduce costs in all product areas as being behind the layoffs, many were interpreting them as resulting from the massive drop-off in its crucial mortgage- and asset- backed securities trading and underwriting franchise.
Meanwhile, Banc of America Securities' layoffs yesterday were directed at the firm's struggling mortgage desk, where 45 to 50 traders and sales staff were cut.
The bank's corporate sales effort saw some firings as well. The investment-banking unit reported only $100 million in profit for the third quarter, a drop of over $1.3 billion.
In the wake of BofA Chief Executive Ken Lewis' blunt remarks last week - "I've had all the fun I can stand in investment banking right now," he said during a conference call to analysts - the likelihood of a layoff-driven retreat from trying to build a major investment bank has been seen as high.
A BofA spokesman declined comment.
Visit DiversityJobs.com for information on Diversity in the workplace
Labels: Bank of America, Bear Stearns, layoffs
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