Blackstone Cutting 7 Percent of Staff

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Blackstone Group reportedly is planning to cut about 70 jobs or 7 percent of its workforce. It's the latest sign the private equity sector is slimming down as deal activity shrivels.

The cuts will affect most business units within the world's biggest private equity firm, says Bloomberg News, citing unnamed sources.

Earlier this month the Carlyle Group laid off 10 percent of its staff and closed at least two offices, according to Investment Dealers' Digest.

Announced buyouts led by private equity firms are down 70 percent this year to $203 billion, according to data compiled by Bloomberg. Blackstone lost $502.5 million in the third quarter and its shares trade about 80 percent below the $31 initial public offering price in June 2007.

Lately the industry was hit with a fresh challenge: Harvard and several other large university endowments that made major commitments to private equity funds in recent years have begun making an about-face and selling their holdings.

Still, money manager and former Blackstone partner Michael Holland told Bloomberg that even though the buyout business is shrinking overall, Chief Executive Stephen Schwartzman "understands that in distressed circumstances comes opportunity. No doubt he'll be selectively adding as well."