Bear Stearns Announces New Round of Job Cuts
The Bear Stearns Companies, the investment bank, said yesterday that it would cut 4 percent of its staff in further fallout from mortgage-related turmoil.
The bank will cut 650 jobs in all departments from its work force of about 15,500. This would be the third wave of layoffs at the bank, which as of last month had cut about 900 positions.
Bear Stearns has been among the hardest hit on Wall Street as investment banks reel from deterioration in the subprime mortgage and leveraged loan markets. The biggest global investment houses and major banks collectively wrote down some $80 billion worth of assets because of the market crisis this summer.
Earlier this month, Bear Stearns said that in the fourth quarter it would write down another $1.2 billion linked to losses from its mortgage-backed securities business. The reduction will result in a quarterly loss for the company.
The latest round of job cuts puts even more stress on James E. Cayne, the chief executive, whose leadership has been under scrutiny since Bear Stearns announced the collapse of two hedge funds in July.
The investment bank said in a memorandum distributed to employees that the current round of job cuts was part of an ongoing review “to best position Bear Stearns for 2008 and beyond.” Employees affected would get severance, benefits and outplacement services, the memorandum said.
Russell Sherman, a spokesman for Bear Stearns, said the jobs cuts would come from across the company and were not restricted to one particular business. In October, Bear Stearns cut 300 jobs from areas including its equity trading business. The company, which is one of the country’s largest underwriter of mortgage bonds, also cut about 600 positions from its mortgage-origination unit.
Shares rose $4.07, to $99.50.
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Labels: Bear Stearns, layoffs
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