Drexel Cuts 10% of Beverly Hills Junk Bond Staff : Layoffs: About 50 employees, including about 40 in California, were dismissed. Lower profits prompted the trims.

Drexel Burnham Lambert Inc. said Tuesday that it dismissed about 50 staff members, including close to 40 in its high-yield junk bond headquarters in Beverly Hills, as part of overall staff cuts that began more than a week ago.

The move eliminates about 10% of the Beverly Hills junk bond staff, which last week totaled close to 325. The layoffs made Monday and Tuesday bring to more than 160 the number of staff members let go throughout the New York-based investment banking firm in the last two weeks, Drexel spokesman Steven Anreder said. He said Drexel’s chief executive, Fred Joseph, has said the firm’s overall layoffs may eventually total 300.

Anreder said all of the planned cuts are in response to lower profits from stock and bond trading and sales in general, which has affected much of the securities industry. He denied that this week’s cuts reflected any loss of confidence in the high-yield, high-risk junk bond market. The market has suffered a severe downturn, although Drexel officials in recent public appearances have predicted a recovery within a few months. Drexel has long been the dominant firm in the junk market.

Drexel’s optimism for the junk bond market “hasn’t diminished,” Anreder said. Company officials have said their market share has not fallen despite the departure of former junk bond chief Michael Milken. The firings are understood to have followed an effort to reduce staff by making cuts in all departments, including traders and salesmen who were felt to be performing below expectations.

Anreder said this week’s staff cuts included both support personnel and professionals, although he declined to provide an exact breakdown or say exactly how many had been let go.

He said this week’s dismissals included people officially assigned to the junk bond department and to the corporate finance department, although the two are interrelated.

This week’s layoffs follow somewhat more than 100 employees let go in the last two weeks, mainly from departments dealing with the sales of taxable fixed-income securities--such as bonds and notes--other than junk bonds. The firm also closed a bond sales office in Atlanta and let go some employees in its stock trading and sales area.

The reductions follow Drexel’s decision to eliminate its entire retail brokerage operation last April after settling civil and criminal charges of securities fraud. The combined cuts reduce Drexel employment down to about 4,500 compared to 10,000 last year.

The securities industry in general has been in a slump since the October, 1987, stock market crash, as many individual investors were scared out of the market. In addition to Drexel, other firms recently have announced new rounds of staff cuts. Among them is Shearson Lehman Hutton.

Perrin Long, a securities industry analyst with Lipper Analytical Services, said he expects additional layoffs throughout the industry, in part because of squeezed profit margins from trading and sales of most types of bonds.