Shearson to Make More Staff Cuts
NEW YORK (AP) _ Shearson Lehman Hutton Inc., suffering from a continuing slowdown in the financial markets, said today that it has begun another round of layoffs.
A source said the layoffs could result in as much as 2 percent of Shearson’s work force being cut in the next few weeks.
The layoffs, which are expected to affect all departments in the securities firm, would be the largest on Wall Street this year.
Shearson notified its 38,500 employees of its decision Monday in a two- paragraph internal newsletter, said company spokesman Steven Faigen.
″The (layoff) process began yesterday,″ he said.
Faigen declined to provide details on the layoffs, saying only that ″several hundred″ employees would lose their jobs in the next few weeks.
However, a company source speaking on condition of anonymity said as many as 800 people, or 2 percent of the work force, could be cut.
Shearson and other securities firms are expected to show a decline in trading profits this year as a result of the stock market’s plunge of last month and the general pressure on takeover stocks.
The wariness of individual investors since the October 1987 stock market crash continues to hurt the securities industry. Securities firms in New York City alone have cut nearly 18,000 jobs from a peak of 163,000 two years ago.
In its internal newsletter, Shearson said the job cuts were decided after reviewing expenses and in light of an impending move by a number of its employees to a new office building.
″The decision to further reduce expenses of all kinds reflects the continued slowdown of activity and the recurring overcapacity in the financial markets,″ the newsletter said.
″The steps announced today are designed to improve overall productivity and ensure that appropriate resources are focused on the business areas with the highest potential for growth and future profitability,″ it said.
Last year, Shearson laid off about 1,200 employees, and since then, it has trimmed another 300 jobs.
Shearson, a subsidiary of financial services giant American Express Co., is the second-largest securities firm in the nation, behind Merrill Lynch & Co.
For the first three quarters of this year, Shearson earned $106 million, or 98 cents a share, down 3 percent from earnings of $110 million, or $1.05 a share, last year. Revenue rose to $9.6 billion from $7.6 billion, but expenses also climbed, to $9.4 billion from $7.5 billion.