JPMorgan Chase & Co. will shut down its global proprietary trading desk and shed some of the unit's employees as the company braces for a recession, a person familiar with the matter said.
Other members of the roughly 75-member group, led by William Johnson in New York, will move to desks that trade for the banking company's own account in equities, fixed-income, foreign exchange, commodities, and emerging markets, according to the person, who declined to be identified because the plan is confidential. JPMorgan Chase spokeswoman Kristin Lemkau declined to comment.
James Dimon, JPMorgan Chase's chief executive officer, told employees in Hong Kong on Monday that the company will face "highly challenging conditions" in 2009. Banks and brokerages worldwide, beset by more than $690 billion of writedowns and losses, have cut almost 150,000 jobs since the credit crisis erupted last year, according to data compiled by Bloomberg.
The breakup of the JPMorgan Chase trading desk was announced internally in a memo from Steven Black and William Winters, the co-chief executives of the company's investment bank. Financial News reported the reorganization Tuesday.
Mr. Johnson, who took over the proprietary unit in April, will work with the heads of JPMorgan Chase's markets groups during the transition, according to the person with knowledge of the plan.
It has not been determined what Mr. Johnson's role will be after that, the person said.