CS First Boston said yesterday that it has laid off at least eight professionals in its, municipal bond department in reaction to poor market conditions.
A spokesman for the firm said that the layoffs have occurred in the sales and trading and public finance departments.
The spokesman said the firm let four investment bankers go, and four executives from its municipal sales and trading department. The public financie department employs 85 people, while sales and trading employs about 60."
The spokesman would not name the individuals, or what titles the executives held. He said the layoffs occurred at various CS First Boston's offices around the country.
"In response to market conditions conditions we expect to prevail for the foreseeable fUture -- we have reduced the size of our municipal Sales and trading effort by four individuals and the size of our public finance department by a similar amount," the spokesman said.
The confirmation of the layoffs comes amid market speculation that First Boston fired about one-third of its investment bankers.
The spokesman would not comment on any future layoffs at the firm, including the speculation that the firm plans to eliminate one-third of its public finance department.
But sources at CS First Boston say executives at the firm expect tough times ahead.
A sharp reduction in municipal bond issuance and a spike in interest rates have forced all firms to trim the size of their municipal work force. Investment banking departments have come under severe scrutiny, because of a sharp decline in negotiated bond issuance.
First Boston, for example, recently felt the impact of being dropped as senior manager in New York City's general obligation bond syndicate. The city is the municipal market's largest issuer. It is scheduled to sell $1.3 billion general obligation bonds today. Bear Stearns & Co., and Lehman Brothers Inc. also were dropped from the City's GO bond syndicate. Lehman has already announced layoffs; Bear Stearns has not.