CSFB needs 1,250 job cuts this year

At the same time, CSFB is on the verge of employing fewer investment bankers than before its $11.4bn (€13bn) acquisition of Donaldson, Lufkin & Jenrette in September 2000, despite having added nearly 1,900 people to its investment banking division with the DLJ deal.

The full results, announced last week, showed that at the end of 2001, CSFB employed 2,965 front-office investment bankers - just 300 more than before it bought DLJ. After merging with DLJ, it laid off a net 1,588 bankers by the end of last year and cost-cutting has continued this year.

Mack confirmed last week that more jobs will go in the division and he has mandated Adebayo Ogunlesi, head of investment banking, to make further unspecified cuts.

In his first few weeks in the job, Ogunlesi is understood to have started laying off bankers, particularly senior staff in New York.

Mack, who has already reduced CSFB's headcount by a net 2,535 since he arrived in the summer, said last week that his aim was to get CSFB's compensation ratio from 57.5% down to 55% this year, and to the Wall Street average of around 50% within a few years. Based on constant 2001 revenues and the $700m savings made by firing 2,500 staff in the fourth quarter, this translates to 1,250 staff cuts.

However, he also plans to reduce guaranteed bonuses from 60% of the bonus pool to around 25%, which could spare hundreds of staff.

To reach a ratio of 50.7%, he would need to reduce staff costs by $950m, based on 2001 revenues, which translates into 3,400 staff.

The grim outlook for the industry is expected to be confirmed this week when Goldman Sachs and Bear Stearns release their fiscal first-quarter results. Goldman is expected to unveil more than 1,000 job cuts.