It remains to be seen just how far Bankers Trust New York Corp. will go in cutting costs, but evidently the bank has already made it clear to employees that the good times are over.
A recent internal "memo," demonstrating the gallows humor that often surfaces when corporate belts are tightened, jokingly suggests that BT employees will soon be paying for their own phone calls, staying with relatives when they travel, and billing airline tickets to clients.
The memo is signed by "Charlie" and "Gene," but the author is apparently someone considerably lower on the Bankers Trust corporate ladder than chief executive Charles Sanford and president Eugene B. Shanks.
The bank was in the front lines of the industry's 1994 march into a derivatives debacle. Then it faced the embarrassment of lawsuits by dissatisfied derivatives clients and ultimately had to disclose a $125 million first-quarter loss on trading and Latin American exposure.
With a staff reduction of 10% now in the offing, some bitter repartee might be expected. But the satirical memo verges well into Swiftian territory in modestly proposing extreme measures.
It starts with a reference to the recent collapse of Barings PLC, the British investment house, and portrays a fictional meeting at which Bankers Trust staff members were subjected to polygraph tests to determine if the New York bank has similar exposures.
It is then suggested that the bank look for inspiration to other companies that have met the cost-cutting challenge head-on. "Barings for example, has cut its expenses to zero, for the time being," the writer deadpans.
Manufacturers Hanover Trust Co. and Drexel Burnham Lambert - neither still in existence, following a merger in Manny Hanny's case and a bankruptcy for Drexel - also are cited as cost-cutting exemplars.
Getting down to brass tacks, the memo bluntly asserts that "every business line in Bankers Trust will stop spending money, effective immediately."
"Electricity is expensive," the note points out. "Lights and computers will only be used during nonpeak hours (0200-0500) - we think we can stall paying the bills for a while. No more elevators. No more mail - deliver the stuff to someone heading in that direction for personal delivery."
As for layoffs, the memo reassures: "There is no corporate staff reduction target - everyone is a target.
"We remain focused on the future. Tomorrow is gonna be great! It's just next week that remains a concern."
