Smith Barney Fires About 120 Employees : Post-Crash Cutbacks Still Plague Entire Industry
Another brokerage house Thursday joined the rash of cutbacks since the October, 1987, market crash as Smith Barney, Harris Upham & Co. said it had dismissed about 120 employees due to a slump in the securities business.
New York-based Smith Barney, part of the Primerica Corp. financial empire recently bought by Commercial Credit Group Inc., said its biggest cuts were in the municipal trading and finance division, which lost 25 jobs.
Equities trading lost 21 jobs, while the other cutbacks were scattered throughout different departments and various regional offices, the company said. Smith Barney has a total work force of more than 6,000 people.
In making the cutbacks, Smith Barney joined the ranks of the Wall Street firms that have trimmed their staffs in the securities industry downturn after Black Monday.
Employment in the U.S. securities industry has been slashed by nearly 20,000, or nearly 8%, since the crash, while analysts say the purge is not over.
Bought Just Before Crash
Shearson Lehman Hutton Inc. said in October that it would shed about 1,000 jobs by the end of the year, while Paine Webber Group said it would make broad-based job cuts, and Morgan Grenfell Group PLC said in London that it would eliminate 450 jobs.
In addition, First Boston Corp. agreed to a $1.1-billion merger with European affiliate Credit Suisse First Boston in October, giving control of the combined group to the large Swiss bank Credit Suisse.
Smith Barney lost $14.5 million in the third quarter due to the post-crash securities slump, contrasted with a profit of $10.5 million in the year-ago period, Primerica said recently.
Primerica paid $750 million for the brokerage house, which specializes in retail brokerage and municipal finance, just four months before the October crash. Earlier Thursday, shareholders of Greenwich, Conn.-based Primerica approved the $1.7-billion merger into Baltimore-based Commercial Credit, chaired by Sanford Weill.
