Bear Stearns has laid off 300 workers across various business units, including its equity trading business. The latest cuts affect about 2% of its 15,500 employees and are blamed on the ongoing credit crisis that has loomed on Wall Street and throughout the country’s housing market.
James Cayne, chief executive of Bear Stearns, wrote in a company memo that the goal is to “deploy our resources in today’s challenging environment where growth opportunities are greatest and to reduce costs in areas that can no longer justify their current level of infrastructure.”
The investment bank has not specified which exact units are affected, and says in the memo that it will continue to add jobs as needed.
The layoffs this week followed a cautionary report by Swiss bank UBS on a potential further downward shift in the U.S. mortgage markets.
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Since the beginning of 2007, Bear Stearns has reduced its mortgage origination related workforce by 40%. On October 3, for example, 310 positions at the nation’s fifth-largest investment bank were cut, affecting staff in its mortgage-origination businesses.
Tom Marano, global head of mortgages, explained the business move as a “hallmark of our franchise” that would help Bear Stearns adapt to changes in the market environment and product demand.