JPMorgan to cut 17000 jobs over 2 years to cut 17000 jobs over 2 years

J.P. Morgan Chase stepped up the pace of bank cost cutting, setting plans to eliminate 17,000 jobs by the end of next year and reduce expenses by at least $1 billion annually.

The move announced Tuesday by the New York company, the nation's most profitable bank in 2012 and the biggest U.S. lender by assets, will reduce its staff by 6.5% in one of the most aggressive reductions to date amid widespread financial-industry cutbacks.

J.P. Morgan is considered among the healthiest of the big U.S. banks, but the cuts show that even it isn't immune to the struggle that is dragging down results at financial companies of all stripes—particularly the effect of low interest rates on profits from lending and investing.

The cuts figure to make J.P. Morgan by staffing the smallest among its peers, a group that also includes Bank of America Corp., BAC +0.91%Citigroup Inc. C +0.34%and Wells Fargo WFC -0.11%& Co. The largest, Bank of America, employed 267,190 people at year-end, while J.P. Morgan employed 258,965.

For 2012, J.P. Morgan reported net income of $21.3 billion, up 12% from a year ago and a company record. But revenue was flat at $99.9 billion, amid a slow U.S. economy that has crimped loan growth and a mixed market environment that has squeezed banking and trading profits. Meanwhile, costs inched up 3%. The results were announced Tuesday by Chief Executive James Dimon and other executives during an investor day presentation at the bank's Manhattan headquarters.

Chief Financial Officer Marianne Lake said a key measure of lending profitability, net interest income, is expected to remain flat this year, although she expects strong loan demand from businesses.

The staff reductions come as the biggest financial firms, many of which grew during the financial crisis by acquiring faltering rivals, accelerate a crackdown on costs. The four largest U.S. banks cut 29,793 jobs last year, according to company filings.

"The industry has elevated costs because of the recession and the financial crisis," said RBC Capital Markets banking analyst Gerard Cassidy. With the crisis mostly past, the big banks "don't need those people anymore."

J.P. Morgan said it would reduce its global staff by a net 4,000 jobs this year and 13,000 next, primarily in the consumer bank and the unit that handles home loans. The majority of J.P. Morgan's cuts in 2013 and 2014 will come from its 45,000-person mortgage group. Kevin Watters, the head of the bank's mortgage operations, said reductions are planned mostly among employees dealing with defaults, which have come down, and among employees related to home lending as volume declines. Mortgages remain "a core product" for J.P. Morgan, Mr. Watters said, and the bank is planning to increase its market share.

Danone to cut 900 jobs

Danone has announced that it will shed 900 jobs across 26 countries and undertake a significant restructure in response to what the company believes is a lasting downturn in the European economy and consumer trends that have led to a significant decline in its sales in the region.

The company had earlier reported that, while worldwide sales were up 5.4% on a like-for-like basis in 2012, European sales were down 3%, with operating income down 10%.

The cost saving program also calls for three major changes. The first is a reduction by approximately half of management units, achieved by combining teams from several countries into multi-country units. Danone will continue to do business in the same number of countries and maintain a division-based structure to make best use of features specific to each business line.

Second is the combination within subsidiaries of several management functions that currently operate separately.

The last sees Danone focusing each level of management (corporate, division, region, etc.) on missions and projects that have a direct impact on business growth. This will also involve simplifying key management processes.

The company believes that this model will boost responsiveness and speed up decision-making, and will also generate savings on general and administrative costs that will contribute to the cost-reduction plan.

Job losses – which will occur over a two year period - will, said the company, emphasise internal mobility and voluntary departures.

“2012 was an important year for Danone in many respects,” said chairman and CEO Franck Riboud. “Important in that we achieved some major milestones: our sales exceeded the €20 billion mark for the first time, reflecting our ability to bring health through food to an ever-increasing number of people. And for the first time, too, our cash-flow topped €2 billion—double the 2008 figure. Finally, even as our Group grew rapidly from 2008 to 2012, our CO2 emissions held steady. Which means a 35% reduction in the carbon intensity of our business.”

“Most of these achievements were due to our operations outside Europe,” he continued, “which now generate 60% of our total sales and reported profitable growth averaging over 10% in 2012. We must make every effort to pursue lasting expansion in these markets.”

“But 2012 also saw some of our business in Europe come under pressure from a severe deterioration in overall consumer demand, which led to a 3% decline in our revenues in this region and a decline of over 10% in our operating income. Clearly this situation is not sustainable, and we will overcome it. In December we set a €200 million target for savings and announced that we intended to launch a plan to adapt our organization. Today we are initiating discussions with our Works Councils over the plan’s main measures, which are designed to win back our competitive edge and achieve greater efficiency in Europe. We will also continue to revamp the product ranges offered by our business lines.”

“So 2013 will be a year of transition, with vigorous development in business in our growth markets and a drive to strengthen operations in Europe,” concluded Riboud. “A year aimed at returning our activities as a whole to strong, profitable growth by 2014.”

Evercore Partners is hiring

Boutique investment bank Evercore Partners had a record-setting 2012, setting the firm up to add talent in the coming year while larger rivals cut staff.

The New York-based advisory firm shocked Wall Street by doubling to $195.5 million its investment banking revenue in the fourth quarter of 2012, compared to the previous year’s Q4, and earning advisory fees from 169 clients, up from 127 in the same quarter a year ago. Evercore saw its profit for the year jump 265% from 2011.

Unlike other U.S. investment banks that booked strong end-of-year results, Evercore will invest its newfound cash in employee compensation and fresh talent. The firm plans to hand out larger bonuses and continue to add to its headcount, which rose from 357 in 2011 to 391 at the end of last year, according to Financial News.

“In 2013 we see a number of opportunities to add senior managing directors and we expect to add additional talent during the year,” Ralph Schlosstein, president and chief executive officer of Evercore, said on an analyst call.

Evercore declined to provide additional comment on their hiring plans. The firm doesn’t advertise specific positions on its website, but is accepting applications for interns, analysts, associates and experienced hires within its investment banking division in the U.S. and in Europe.

Barclays to Cut 3,700 Jobs

LONDON—Barclays on Tuesday said it would slash several thousand jobs as part of a three-year effort to rebuild the bank's tattered reputation and ready it for a tougher regulatory environment.

Under Chief Executive Antony Jenkins' new plan for the lender, around 3,700 jobs will go, mostly in its investment bank, as it aims to slice around 9% from its £18.5 billion cost base by 2015.

Barclays will focus future investment on its U.K., U.S. and African operations. Meanwhile, the bank's loss-making European retail operations will prioritize targeting wealthy customers. The bank's powerful investment bank, which historically has accounted for more than half of profits, will be "repositioned" in Europe and Asia, where the division has less traction with clients than in the U.K. and U.S. Some 1,600 jobs have already been cut, mostly in Barclays European and Asian equities teams.

Since his arrival in August, following a management clear-out sparked by allegations of rate rigging, Mr. Jenkins has pledged to rebuild a bank with a lower risk appetite and better relations with regulators.

Barclays Capital Cuts Up to 10% of U.S. Staff Days Before Bonus

Barclays cut between 5% and 10% of its capital markets, advisory and other investment banking units in the U.S. yesterday, just days before bonuses are scheduled to be announced.

The cuts ran the gamut in terms of seniority, affecting first-year associates through director level. The source had no knowledge of anyone on the managing director level being cut.

Barclays declined to comment.

In an unusual and somewhat brutal move, the eliminations included first-year investment bankers, said the source. Normally graduates who join Barclays in investment banking keep their jobs for a minimum of two years to “assess whether they like the job and perform before they are considered to be put under the chopping block,” the source said. “Now banks evaluate people as soon as they walk in the door.”

The cuts come just before bonuses are due to be announced on Friday, according to a source in the bank, and those laid off won’t be eligible to be paid bonuses. That will save Barclays millions of dollars.

“If there is a fully discretionary provision, there is really no recourse for the employee,” said Joanne Seltzer, a partner in the New York City office of Jackson Lewis LLP. Seltzer wasn’t specifically commenting on Barclays cuts.

As is the practice at many banks governed by U.S. employment laws, Barclays made its job cuts with efficiency. “They call your desk, you go to your manager’s office, he says you’re being let go. You can’t talk to anyone, and they tell you that if everything doesn’t go to plan, security is standing by,” the source said.

“It’s like an execution.”

The firm will also lay off an additional 275 investment banking employees in May as part of its strategic review, according to Bloomberg Businessweek. The May cuts are based on economics, according to the company.

Illinois : Companies warn of nearly 1,200 layoffs

Nine companies announced they may shed nearly 1,200 jobs in coming months.

The total comes in the state's January Worker Adjustment and Retraining Notification Act, or Warn report. Some of the moves had been disclosed previously, including those by Sun-Times Media LLC and Best Buy Co.

The biggest possible job losses in the report are at Lyon Workspace Products LLC in southwest suburban Montgomery. The Aurora-based industrial workspace manufacturer, which makes products including steel lockers and storage racks, may lay off as many as 456 workers after filing for Chapter 11 bankruptcy protection last month, saying it wants to sell itself while continuing to operate. A company representative did not immediately return a call for comment.

Elsewhere, Sun-Times Media, publisher of the Chicago Sun-Times and other suburban papers, warned that 274 jobs in north suburban Glenview, south suburban Tinley Park and west suburban Aurora may be eliminated as the company consolidates suburban operations in its River North headquarters.

The number of jobs cut depends on how many suburban workers agree by Feb. 25 to move to the headquarters, Ted Rilea, the company's vice president of labor relations and human resources, told Crain's.
Other layoffs:

• Walgreen Co., the Deerfield-based drugstore chain, will shed 65 warehouse employees in west suburban Berkeley.
• Kmart, part of Hoffman Estates-based Sears Holdings Corp., will lay off 98 workers when it closes a store in Naperville in late March or early April. More than a year ago, Sears Holdings announced it would close up to 120 underperforming Sears and Kmart locations.
• Georgia-Pacific Corrugated LLC said it would shed 108 jobs from its Chicago manufacturing site. The company is a division of Atlanta-based Georgia-Pacific, one of the world's largest manufacturers of tissue, packaging and paper.
• Cincinnati-based grocery store chain Kroger Co. will shed 65 jobs as it closes a store in downstate DuQuoin.
• Cardinal Health, the Dublin, Ohio-based health care services giant, will lose 63 jobs as it closes a medical equipment wholesale facility in Lake County's McGaw Park. Cardinal said last week that it would cut some 650 jobs in the north suburban Waukegan areaand put most of the MGaw Park property up for sale.
• Richfield, Minn.-based Best Buy will eliminate 58 jobs as it closes its store near Westfield Old Orchard shopping center in north suburban Skokie.

Illinois: Tellabs will cut 300 jobs

Naperville, Illinois-based Tellabs Inc. said Friday it will cut about 300 jobs after it posted a $23 million loss in the fourth quarter.

CEO Dan Kelly said on a conference call that the company plans to cut expenses, including via the job cuts. The company, which has about 2,600 employees worldwide, would not specify where the job cuts would be.

Tellabs' fourth-quarter revenue was $242 million, compared with $317 million in the year-ago quarter. It also posted a net loss of $23 million, or 6 cents per share, in the fourth quarter, compared with a net loss of $5 million, or 1 cent per share, in the same period in 2011.

Overall, 2012 revenue was $1,05 billion, compared to $1.28 billion in 2011.