LONDON J.P. Morgan Chase & Co.s head of European investment banking told staff members that he wants them to improve their attendance at client meetings by not attending.
The number of client calls where we have too many people from J.P. Morgan attending is rising rapidly, Klaus Diederichs said in a four-paragraph memo. This is clearly not very productive and more importantly makes us look silly in front of clients. More staffers should be looking for new business instead of attending these meetings, he wrote.
J.P. Morgan Chase, like its rivals, is facing a slowdown in investment banking. Global mergers fell 60% in the first quarter and new stock sales slid 39%, according to Bloomberg data. Goldman Sachs Group Inc. is firing about 150 of its investment bankers, and Morgan Stanley Dean Witter & Co., Merrill Lynch & Co., and other securities firms are eliminating more than 10,000 jobs.
At J.P. Morgan Chase, bankers must call on new clients as we need to broaden our client base as a matter of urgency, Mr. Diederichs wrote. He was not available for comment.
Andrei Ilyin, an analyst at Nomura International PLC, said that if J.P. Morgan Chase fails to win more business or increase their market share, it will have to cut jobs. Clearly the message is that there will be retrenchments if the market environment doesnt pick up.
Mr. Diederichs memo was written almost five months after J.P. Morgan Chase was created with Chase Manhattan Corp.s $32 billion purchase of J.P. Morgan & Co. The combined company has 102,000 employees worldwide, including about 20,000 in Europe. J.P. Morgans first-quarter profit slumped 28% after losses from venture capital investments and a decline in fees from investment banking.