Bloomberg News
SAN FRANCISCO - Thomas Weisel Partners LLC plans to fire 80 employees this week, mostly in investment banking, because of declining revenue.
The cuts come to almost 10% of the San Francisco investment boutique's staff.
Second-quarter revenue of $74 million was down 44% from a year earlier, said the company, which focuses on technology. Third-quarter revenue is expected to be about level with second-quarter, spokesman Mike Connolly said. The job cuts are meant to reduce costs as fees from advising on mergers and arranging initial public offerings dry up, Mr. Connolly said.
"It's a question of making sure we are strong when the economy turns,'' he said of the cuts. "There's a point where we have to be conservative.''
None of the 69 partners at the firm will be fired, and "very few" firings are expected in research, Mr. Connolly said. Weisel is privately held and partners divide its income after costs. Thomas Weisel, the former chief executive of NationsBanc Montgomery Securities Inc., founded the firm two and a half years ago at the height of the bull market in technology stocks.
The firm was the lead manager of one stock offering this year, a $158 million secondary stock sale for Arena Pharmaceuticals Inc., according to Bloomberg league tables. Its merger business has also dropped. Weisel has advised nine companies on mergers or divestitures totaling $2.8 billion this year, down from 42 companies and $62.8 billion for all of last year, according to Bloomberg data.
Because of the decline in technology stocks, Weisel this year scrapped a joint venture with Zurich Scudder Investments Inc. to raise an investment fund for wealthy individuals to invest in private equity, initial stock sales, and hedge funds, the companies said at the time.
Weisel's revenue more than doubled from last year as it built the securities firm to focus on the booming technology sector. It also doubled its employee count in the past year, to about 850 professionals, the firm said.
