Mack 'the Knife' to cut a further 1,750 jobs at CSFB
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Your support makes all the difference.John Mack, the chief executive of Credit Suisse First Boston, has told employees that 1,750 more jobs would have to go due to the worsening economic environment, bringing the total number of job losses since his arrival in July 2001 to 6,500.
The move is an attempt to save an extra $500m (£321m) of costs from the loss-making investment bank whose current headcount is 25,000 globally.
Mr Mack, known as "Mack the knife" for his cost cutting zeal, wrote in an e-mail to staff on Monday: "Market conditions have continued to decline. The result is that we are forced to make some very tough decisions, the hardest of which is to further reduce headcount. Eliminating jobs is never easy, but it is especially difficult when people have been working so hard for the firm."
But Mr Mack, in common with most investment bankers, was keen to stress the likelihood of an upturn in the sector. "After 35 years in this business, one thing I know for sure is that the markets will recover," he included in his e-mail.
CSFB is struggling more than many in the investment banking sector. Last week CSFB's parent, Credit Suisse, warned the investment bank would make an operating loss in the third quarter after "lower revenues and further provisioning". The Swiss giant's insurance arm, Winterthur, has also needed two cash injections due to falling asset values and because the business has written a large number of insurance policies that contain guaranteed payments.CSFB turned a $60m profit in the second quarter.
The job cuts are likely to start this month and mainly hit CSFB's US mergers and acquisitions teams. Mr Mack said they would affect various regions and functions across the investment bank and will include cuts in the London headcount.
Investment banks have already slashed their staff in order to cope with the worst downturn to hit the sector since the 1970s. JP Morgan is understood to be planning a cull of a further 20 per cent of its investment banking staff, which would mean losing between 3,000 and 4,000 jobs. Goldman Sachs, which has cut its net headcount by 2,000 in the past year, is also understood to be trimming staff, and Dresdner Kleinwort Wasserstein recently announced a further 3,000 cuts in corporate and investment banking.
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