Credit Suisse, Deutsche, Goldman & Citi Wield Job Axe
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HereIsTheCity estimates that around 1,800 staff have now lost their jobs at Credit Suisse investment bank since the credit crisis started 10 months or so ago. This represents about 9% of the total unit staff.
Financial News reports that Deutsche Bank is to close its mid-market equity sales trading business at the end of the month, with the loss of up to 6 jobs (although the bank may find jobs for some of the bankers in other areas). The move comes just a week after the bank axed 30 staff from its London-based equity and derivatives contingents.
The Financial Times reports that Goldman Sachs is now expected to cut 10% of its investment banking staff due to the M&A deal slowdown. The firm confirmed last week that some employees had already been let go. The Mail-on-Sunday reported last week that up to 3,200 Goldman staff could lose their jobs this year.
The Wall Street Journal reports that Citi is also to begin cutting 10% of its investment banking division staff this week. The cuts are part of the already-announced package, but are thought likely to focus more on senior staff, including senior managing directors. The main cuts will come in London and New York.
Reuters also reports that many of the US firms have been busy culling specialist sales staff recently, with Morgan Stanley laying off staff who pitched bonds with embedded derivatives to private banks.
Analysts have again slashed their earnings estimates on the big banks, as the credit crisis shows no immediate sign of a let-up. Credit Suisse, Deutsche, Goldman, Lehman Brothers and Merrill Lynch analysts are all in agreement that the outlook for banks is not good, and that many will need to undertake an additional round of capital raising to compensate for additional asset writedowns likely this year. Merrill analysts are predicting dividend cuts at Bank of America and Wachovia.
Stock in Merrill fell 3.5% Friday on more writedown rumours, while Lehman shares fell 2.7% and Morgan Stanley dropped Friday 2.9%.
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