RBC Capital Markets, the investment banking arm of Royal Bank of Canada, is cutting jobs in its U.S. fixed-income division as a slump in credit markets curbs revenue on Wall Street.
People with knowledge of the situation said RBC Capital cut 40 fixed-income sales positions and may close its Fort Lauderdale, Fla., office.
Chuck Powis, who became the head of U.S. fixed-income sales in New York as part of the restructuring, said in an e-mail last week that RBC Capital reorganized its U.S. fixed-income unit "in the face of challenging credit markets."
The reorganization "involves changes that we feel are necessary to better align our business to these volatile markets," according to the e-mail, which was obtained by Bloomberg News but did not refer to job reductions. Mr. Powis, 44, confirmed the e-mail's contents but would not discuss the cuts.
Before the restructuring Mr. Powis was the head of U.S. structured credit and rates. Mike Quinn, 42, was named the head of U.S. credit trading but remains co-head of structured credit financial products.
U.S. bond traders are losing or leaving their jobs as losses sparked by defaults on subprime mortgage securities are spreading throughout the credit markets.
Royal Bank of Scotland Group PLC's RBS Greenwich Capital said in an e-mail last month that it "resized" a department that deals with collateralized debt obligations.
Kevin Foster, a spokesman for RBC Capital, would not say how many cuts were made or how many salespeople remain at the U.S. fixed-income unit.
"We have made some changes to our operations — this is a strategic response to changing opportunities in the U.S. fixed-income market," Mr. Foster said in an e-mail. "Our fixed-income and currency business is not experiencing a significant change in business performance."