Jefferies & Co. May Cut Up to 11 Percent of its Workforce in Wake of Stock Drop
Jefferies & Co. is planning to make dramatic cuts in its workforce amid a sharp drop in its share price, with investors questioning whether the firm will be able to keep its independent investment bank status or be forced to either merge with another player, the FOX Business Network reports.
“People inside the firm say the cuts are occurring most heavily in Jefferies' equities division, and according to traders inside the firm, they could total as much as 11 percent of the entire firm when the job cutting is complete,” Fox contributor Charlie Gasparino reported.
A spokesman for the New York-based Jefferies had no immediate comment on the size of the cuts, but he would not deny that job reductions are taking place.
Shares of Jefferies have declined more than 50 percent over the past year, with some of the sharpest declines coming in the aftermath of the MF Global implosion, and eventual bankruptcy filing in November.
In late November, Jefferies continued to cut its holdings in Europe again to fend off speculation about its financial strength.
“We have further reduced our total gross exposure to Greece, Ireland, Italy, Portugal and Spain by almost another 50 percent (for a total reduction of nearly 75 percent), and our net exposure remains insignificant at net short $134 million,” according to a letter posted on the New York-based firm’s Web site today. The stakes equal about 3.8 percent of shareholders’ equity, the company said.