Market Woes Force 2% Layoff at Shearson

From Associated Press

Shearson Lehman Hutton Inc., suffering from a continuing slowdown in the financial markets, today began another round of layoffs.

A company source said the layoffs could result in as much as 2% of Shearson's work force, or 800 people, being cut in the next few weeks.

The layoffs, which are expected to affect all departments in the securities firm, would be the largest on Wall Street this year.

Shearson notified its 38,500 employees of its decision Monday in a two-paragraph internal newsletter, company spokesman Steven Faigen said. He declined to provide details on the layoffs, saying only that "several hundred" employees will lose their jobs in the next few weeks.

Shearson and other securities firms are expected to show a decline in trading profits this year as a result of the stock market's plunge of last month and the general pressure on takeover stocks.

The wariness of individual investors since the October, 1987, stock market crash continues to hurt the securities industry. Securities firms in New York City alone have cut nearly 18,000 jobs from a peak of 163,000 two years ago.

Last year, Shearson laid off about 1,200 employees, and since then it has trimmed another 300 jobs.

Shearson, a subsidiary of financial services giant American Express Co., is the second-largest securities firm in the nation, behind Merrill Lynch & Co.

For the first three quarters of this year, Shearson earned $106 million, or 98 cents a share, down 3 percent from earnings of $110 million, or $1.05 a share, last year. Revenue rose to $9.6 billion from $7.6 billion, but expenses also climbed, to $9.4 billion from $7.5 billion.

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