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Nomura to cut up to 1,000 jobs in Europe, after saying no job cuts planned less than three weeks ago

December 4, 2008
By Ken Worsley


On November 19, Nomura CEO Kenichi Watanabe told reporters at the Foreign Correspondents’ Club of Japan, “There are no specific job cuts planned at this point.”

Yesterday, Nomura announced that about 1,000 jobs would be shed in Europe, in order to reduce payroll costs by as much as 20%. The Nikkei reports that Nomura has incurred about 2 billion yen in losses as a direct result of acquiring the remnants of Lehman Brothers. The current round of job cuts is expected to take place at Nomura’s London offices.

The Nikkei article concludes with this vague statement:

Nomura also inherited a total of roughly 8,150 employees through its buyout of Lehman Brothers’ Asia-Pacific division and Indian information technology operations. Some of these workers could face layoffs eventually…Other Japanese financial firms are also expected to cut jobs at their foreign branches.

Eventually? Other firms? Someone clearly knows more than they can write at the moment. Nomura is also looking to raise about 410 billion yen through a new bond issuance.

This article also provides a vague statement about Nomura’s future plans: “Asked whether Nomura is planning on layoffs at its Asian operations, the spokesman declined to comment.”

What we see in the media thus far leads us to believe that Nomura is far from finished in terms of slashing jobs.

Filed Under Banking, Finance 

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Comments

9 Responses to “Nomura to cut up to 1,000 jobs in Europe, after saying no job cuts planned less than three weeks ago”

  1. Albrecht on December 5th, 2008 11:25 am

    Impressive. The Lehman acqusition is blowing up less than two months after being announced.

  2. Ken Worsley on December 5th, 2008 1:45 pm

    Not sureif it’s “blowing up” yet, but when I saw the CEO’s original statement I assummed the opposite was true, or at least would come to pass.

  3. Steven Towns on December 7th, 2008 12:16 pm

    Ken, good DD, but more than anything, given the perilous state of global financial markets (which has more than spilled over to the “real” economy), financial industry layoffs (even in Japan and for Japanese subsidiaries) are inevitable. While relatively sounder than overseas rivals, Japan has profound issues of its own, let alone the old “liquidity trap” that happens to mesh ever so nicely with the “value trap.” On a separate note, have you seen/heard anything about the status of Nomura’s investment in Fortress Investment Group? That is one fortress you don’t want to be trapped in.

  4. Ken Worsley on December 8th, 2008 12:48 am

    Steven, Agreed, layoffs are inevitable, and there are more to come following the holiday season. But the issue is with Nomura’s management not at least appearing to be honest in its public statements.

  5. Steven Towns on December 8th, 2008 3:07 pm

    Fair enough. I guess I’m less moved by the decision given the extraordinary circumstances financial players are facing. That said, senior management ought to consider being more careful with public statements.

  6. Ken Worsley on December 9th, 2008 11:22 am

    And another 100 jobs in Asia:

    Nomura To Lay Off More Than 100 Employees In Asia

  7. David on December 9th, 2008 11:59 am

    Ken and Steven, I actually interpret the original comment differently to the two of you it would seem. I think senior management were very careful in what they said.

    To me the comment “There are no specific job cuts planned at this point.” by referring to “specific” indicates that job cuts are likely (or they are at least investigating them) even if they don’t have specific details on the numbers or positions.

  8. Ken Worsley on December 9th, 2008 2:21 pm

    David, I’ve definitely considered the ‘plausible denaiability’ factor of the word ’specific’. You’re right that they were very careful.

  9. Jose on December 17th, 2008 10:59 pm

    There are definitely more cuts to come, I don’t think that will be much of a surprise to anyone. Foreign financials have cut about 10% of staff in Japan over the last year and a half. Look for this to increase with losses on disintermediated positions to be priced in.

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