Nomura Holdings Chief Executive Officer Kenichi Watanabe, who’s spending $2 billion to take over 8,000 employees from bankrupt Lehman Brothers Holdings, said he isn’t planning any significant job cuts.
“We don’t have a plan for job redundancies, though we could downsize or enlarge some businesses,’’ Watanabe told reporters in Tokyo On Wednesday. “We’re even increasing staff in New York.’’
Nomura, Japan’s largest brokerage, agreed last month to take over Lehman’s operations outside the Americas, pledging to guarantee bonuses in an attempt to keep the workers it acquired from joining other firms. Financial companies worldwide have cut more than 160,000 jobs since the credit seizure began in 2007.
The acquisition, which Watanabe called a “once in a generation opportunity,’’ will lead to $2 billion in costs, the firm said on October 28, without giving a timeline. The Tokyo-based company posted its third straight quarterly loss in the three months ended September 30.
“Nomura’s rivals overseas have been massively eliminating staff since it decided to take over Lehman,’’ said Azuma Ohno, a Tokyo-based analyst at Credit Suisse Group. “Nomura will be forced to think about job cuts as an option to make flexible and drastic cost cuts.’’
Nomura, which closed 3.5 per cent lower at ¥749 in Tokyo trading On Wednesday, has slumped 17 per cent since October 28, compared with the Nikkei 225 Stock Average’s 16 per cent gain.
Losses swell
Nomura posted a wider-than-expected ¥72.9 billion ($754 million) second-quarter loss, putting it on course for a record full-year deficit. The firm’s first-half shortfall of ¥149.5 billion was more than double its record ¥67.8 billion annual loss last year, prompting Standard & Poor’s and Moody’s Investors Service to say they may cut the firm’s credit ratings.
“We want to turn to a profit as soon as possible,’’ Watanabe said On Wednesday, declining to provide any time frame. “Our profitability is unstable, and it’s linked to the market and financial situation.’’
Employee compensation and benefits averaged $332,000 at Lehman in the year ended November 30, 2007, according to the US company. The average salary at Nomura was $144,000, according to the Japanese firm.
Nomura may eliminate at least 30 positions in Tokyo, mainly among former Lehman employees, two people familiar with the matter said last week, declining to be identified because no public announcement has been made. Nomura is offering employees in departments including fixed income the option of resigning with a redundancy package, the people said.
