Moelis Says Wall Street Banks May Be Forced to Cut 35% of Jobs

[marmar]

from Bloomberg:



Moelis Says Wall Street Banks May Be Forced to Cut 35% of Jobs

By Zachary R. Mider and Erik Schatzker

April 9 (Bloomberg) -- Kenneth Moelis, the former president of UBS AG's investment bank, said Wall Street firms may have to eliminate as much as 35 percent of employees as leveraged lending dwindles and the pace of mergers and acquisitions slows.

``The Street got staffed up to support what was a slight bubble in M&A,'' Moelis, 49, said in an interview on Bloomberg Television today. ``You're going to see a significant retrenchment.''

Moelis resigned from UBS, Switzerland's largest bank by market value, a year ago and now runs Moelis & Co., an investment banking boutique. Some of the largest financial ``conglomerates'' may break up as Wall Street shifts focus from lending to its clients to furnishing them with strategic advice, he said. Wall Street banks hit by mortgage losses and writedowns have cut more than 34,000 jobs in the past nine months, the most since the dot-com boom fizzled in 2001.

``They're going to have to go back out and remember that their client is a relationship, not a counterparty,'' said Moelis, who is based in Los Angeles. His clients include Yahoo! Inc., which rejected a $44.6 billion buyout bid from Microsoft Corp. in February.

UBS is seeking shareholder approval for a 15 billion-Swiss franc ($14.8 billion) capital increase and for the appointment of Peter Kurer, the company's top lawyer, as chairman. A bet on mortgage securities at the peak of the U.S. housing market led to almost $38 billion of writedowns and 25 billion francs of losses since the third quarter of 2007, the most by any bank.

Former UBS President Luqman Arnold called last week for a breakup of the Zurich-based bank and urged it to seek a banking expert to succeed Chairman Marcel Ospel, rather than Kurer. Arnold's Olivant Advisers Ltd. holds 0.7 percent of UBS.


http://www.bloomberg.com/apps/news?pid=20601087&sid=aEiGgw2lOnUk&refer=home

[no_hypocrisy]

1. Reminds me of a joke from 1986, the last time this happened.

What do you say to a Wall Street broker?
Fill'er up with regular, please. Cash.

[The Backlash Cometh]

2. If they start from the top down maybe they only have to cut 15%?