Bloomberg News

Nomura Said to Prepare for Job Cuts of About 5% in Europe

September 13, 2011

(Updates with share price in the sixth paragraph.)

Sept. 14 (Bloomberg) -- Nomura Holdings Inc., Japan’s largest brokerage, is preparing to trim about 5 percent of jobs in Europe to reduce costs, according to two people with knowledge of the matter.

The cuts may be announced as early as today, the people said, declining to be identified because the information is confidential. Fewer than 400 positions will be eliminated globally, with the majority in Europe, one of the people said.

Nomura joins Bank of America Corp., HSBC Holdings Plc and global rivals in trimming jobs as faltering economic growth and Europe’s debt crisis threaten to curb trading income and investment-banking revenue. The Tokyo-based company, which bought Lehman Brothers Holdings Inc.’s Asian and European units in 2008, said on July 29 that it plans to reduce expenses at its wholesale unit by about $400 million annually.

“Job cuts will be inevitable under such market conditions,” said Katsunobu Komizo, chief executive officer at Executive Search Partners Co. in Tokyo, a recruitment firm. “Investors cannot wait for so long and expect the bank to get fruits in a short term.”

Joey Wu, a Tokyo-based spokeswoman for Nomura, declined to comment. Nomura had 4,436 employees in Europe as of June 30, most of whom are employed in its wholesale unit, which includes its investment banking and trading operations in London.

European Loss

Nomura shares rose 0.3 percent to 297 yen at 9:10 a.m. in Tokyo. They fell to 286 yen two days ago, the lowest closing price in almost 37 years, on concern that slowing growth in the global economy may hinder overseas expansion plans.

The company’s international units posted a pretax loss of 32.8 billion yen ($425 million) in the quarter ended June 30, the biggest in at least five quarters. In Europe, the company lost 31.7 billion yen, and in Asia it lost 1.5 billion yen.

“Nomura will be able to increase its income by cutting human costs,” Komizo said.

Global banks including those in the U.S. and Europe have announced 120,000 job cuts this year, according to Bloomberg Industries. Combined revenue for the 20 largest global investment banks was down 8 percent in the first half, after a 23 percent drop in the same period last year, Barclays Capital analysts said in a report last month.

Bank of America, the biggest U.S. lender by assets, said on Sept. 12 it will eliminate 30,000 jobs in the next few years, while London-based HSBC said last month it will cut 30,000 jobs worldwide by the end of 2013.

--Editors: Edward Evans, Steve Bailey.

To contact the reporters on this story: Takahiko Hyuga in Tokyo at thyuga@bloomberg.net; Ambereen Choudhury in London at achoudhury@bloomberg.net; Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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