Bankers Trust New York Corp. on Monday told 150 employees of its processing and investment management division that they would be out of a job by the end of the year.
The layoffs are the result of a recent internal merger within the oft-restructured unit, known as Global Assets. In September, Bankers Trust combined a Global Assets group that sells services to banks, governments, and agencies with another that focuses on corporations and nonbank financial institutions.
The resulting entity, dubbed Global Institutional Services, employs some 3,000 people. The 150 employees getting pink slips represent staff and back-office functions that were made redundant by the September reorganization, said B.J. Kingdon, the managing director who runs Global Institutional Services.
Seen as Inevitable
"When we combined the market segment pieces into one large processing arm, it was obvious we would create some efficiencies," Mr. Kingdon said.
All levels of employees, ranging from clerical workers to managing directors, will be hit by the staff reductions. Mr. Kingdon said Bankers Trust is hoping to find new assignments for many of the affected employees elsewhere in the $85 billion-asset banking company.
Members of Global Institutional Service's marketing and sales forces will, for the most part, be immune to the layoffs, Mr. Kingdon said.
"We are committed to this business," he said. "It is a massive annuity income stream for the bank."
Bankers Trust does not reveal profits from individual lines of business.
Revenues Increase 50%
But Mr. Kingdon said revenues at his unit - which provides custody and securities processing, cash management and trade processing, corporate trust and agency services, as well asset management products - are up 50% this year compared with 1992.
Brown Brothers Harriman & Co. analyst Raphael Soifer estimates that Global Assets, which also houses Bankers Trust's retirement services and individual services businesses, earned $73 million during the first half of the year, representing 15% of the company's net income.
The internal consolidation that created Mr. Kingdon's unit was the handiwork of Bankers Trust president Eugene B. Shanks Jr., who was tapped to take operating control of Global Assets in September.
At Global Assets, Mr. Shanks is filling a vacancy created by the pending departure of Edward A. Lesser, a Bankers Trust vice chairman who plans to retire at yearend.