NEW YORK Bear Stearns Cos. is cutting staff as a slowdown in stock underwriting and mergers cuts investment banking revenue.
Bear Stearns, which has 11,200 employees, is expected to slice about 500 jobs starting this week, according to people familiar with the situation.
Payroll is the firms biggest expense, costing about 50 cents of every dollar of net revenue. When fees shrink, job cuts typically follow. At Bear Stearns, fourth-quarter compensation as a percentage of net revenue rose to 52.8%, from 48.5% the year before.
Goldman Sachs Group Inc. is also in the process of letting people go, though this is part of its annual layoffs of poorly performing employees, said Lucas van Praag, a London-based spokesman for Goldman. This is part of the way in which we ensure the standards of the firm are maintained at the highest level, Mr. van Praag said.
The cuts will be made among 650 people, the bottom 5% of the 13,300 who were on the payroll at the end of 1999, according to Andrea Rachman, a spokeswoman for the firm.
Among other recent layoffs, Merrill Lynch & Co. cut 60 bond and stock jobs in January.
Bear Stearns plans to cut computer and information systems employees and close its 140-person Tampa office, according to people familiar with the situation. Peter Cherasia, who became head of the unit last January, didnt return calls seeking comment. Gino Graci, managing director of the facility, declined to comment. Hannah Burns, a spokeswoman at the firm, declined to comment.