Jefferies to cut 15% of workforce

New York: Middle market investment bank Jefferies Group Inc will slash nearly 15 per cent of its employees worldwide and close offices in Dubai, Singapore and Tokyo as it contends with heavy losses for 2008.

The bank also said on Wednesday it expects a fourth-quarter operating loss in line with the one it posted in the first quarter, when it lost $60.5 million (Dh222.5 million), or 43 cents a share. That would not include $340 million in losses from severance costs and changes in its accounting for stock-based compensation.

The bank began laying off employees on Tuesday, according to sources familiar with the situation. Jefferies said it expects to end 2008 with around 2,150 employees, down from its current level of 2,465 workers. The firm had already slimmed down from 2,529 employees a year earlier.

The New York firm has offices in leading financial centres across the United States, the UK, Switzerland, Germany, France, UAE, India, China, Japan, and Singapore, according to its website. It said it planned to restore its presence in Dubai, Singapore and Tokyo "when appropriate."

Jefferies also said it has taken a number of steps to cut expenses and improve its bottomline.

The cuts mark a turnabout for Jefferies, which as recently as October emphasised plans to continue hiring talented bankers and traders freed up by bigger Wall Street firms hit by the global credit crunch.

Fortified with capital from Leucadia National Corp earlier this year, the firm made a number of hires in the past few months, picking up top-tier names from Lehman Brothers and Bear Stearns.

Among others, Jefferies hired Lehman's Jason Roelke to run derivatives sales and added 25 global equity markets staffers from Bear Stearns in London.