JP Morgan Chase Lays Off 200 Executives
According to Charles Gasparino of CNBC.com, JP Morgan Chase has launched a major round of layoffs in the firm's highly regarded investment banking department. In an attempt to downsize the unit amidst a massive slowdown in business, at least 200 executives – most of them junior bankers – were laid off last week. The firm says that the layoffs are unrelated to the firm's recent purchase of Bear Stearns, but it has also said that it will cut JPMorgan Chase people to make room for Bear Stearns executives it wants to keep.
JP Morgan has as many as 1,000 executives in the investment-banking department, which translates to a cut of at least 20 percent. While most Wall Street firms have been cutting between 5 and 10 percent of their staff, cuts at JP Morgan are comparably deeper even though the bank has not faltered as much as other firms with losses related to investments in subprime securities.
The mergers and acquisitions department was particularly hard hit. As many as half the people in that department were told they no longer have jobs.
Earlier this year, CEO Jamie Dimon, a noted cost cutter, told investors he wanted to create a "fortress-like" balance sheet that could withstand the credit crisis and put JP Morgan in a position to take on Goldman Sachs.
Dimon has plans to cut additional jobs to reflect both the worsening business conditions and the addition of employees following the Bear Stearns purchase.
