Morning Coffee: Bank CEO confirms that he's been firing people to hire some new ones. JPMorgan takes out tech staff, again
Peter Orszag will be the new CEO of Lazard. Although this is comparatively new news, the incoming CEO and former head of Lazard's advisory (M&A) unit, undoubtedly had something to do with the decision last month to cut 340 people, or 10% of its staff. And Orszag is already putting his own spin on the reasons those cuts took place.
“With the building blocks now in place for yet more ambition in the advisory business, we’re poised to bring on additional senior talent,” 54-year-old Orszag declared last week, adding that he will also be having a "fresh look" at the firm as a whole.
The implication is that Lazard under Orszag is intending to engage in upgrading, otherwise known as firing existing people to hire some new ones. Outgoing CEO Ken Jacobs implied something similar when he announced the layoffs and said cutting people early in the cycle allowed for the addition of new "senior talent, productive talent" at a cheap price.
Where will the new talent come from? Morgan Stanley has recently liberated some people; Barclays' US business has sprung a leak. The Financial Times suggests Lazard could certainly do with some new bankers: rival firm Evercore's share price has nearly tripled in the past 12 years, while Lazard's has stagnated.
Orszag needs to lure fresh talent beyond ex-Citi banker and failed mayoral candidate Ray McGuire, who joined in April. Whether the new CEO will be able to afford a comprehensive staff upgrade is questionable though: when Jacobs announced the cuts he said they would affect people who weren't productive, implying cheap support and operations staff were being chopped instead of expensive MDs. Only 10 people are going from Lazard's London office, although there's at last one presumably unproductive MD in that number.
Separately, in a further sign that technology staff are now on the front line of banking job cuts, the 500 jobs trimmed from JPMorgan last week didn't just include junior bankers but technology staff too.
CNBC reported that JPM's 500 cuts mostly impacted people working in technology and operations jobs across all its main divisions. They follow cuts to technology jobs at JPMorgan's investment bank in February.
JPMorgan has been talking about making its technology team more efficient for at least three years. One technologist inside the bank says this year's cuts may also have something to do with the fact that staff turnover has plummeted, making budgets unexpectedly tight in some teams.
Meanwhile...
Three Barclays bankers, including John Miller, Barclays’s global chairman of investment banking, as well as managing directors Kurt Kohlmeyer and Richard Siegel, have left for Jefferies. (Bloomberg)
Morgan Stanley let go of three people in leveraged finance, including Taif Adams, co-head of leveraged finance credit, Oskar von Kretschmann, head of loan trading, Patrick Punga, a credit trader in leveraged finance. (IFR)
Former FTX Research CEO Caroline Ellison was quiet, reserved, competitive and a person who "would marry her math homework if that was legal.” She found Sam Bankman-Fried mildly annoying, according to a friend. (Fortune)
Temasek Holdings cut compensation for senior management and the investment team responsible for investing in FTX. (Bloomberg)
Chinese quantitative hedge fund Shanghai Ruitian Investment LLC lost its lawsuit claiming its former head of high-frequency trading strategy took its secrets when he joined a rival. (Bloomberg)
Credit Suisse ordered to pay $926mn to former prime minister of Georgia after its former private banker Patrice Lescaudron defrauded him to buy luxury houses, sports cars and Rolex watches. (Financial Times)
It's a bad time to work for emerging private equity funds. New funds are struggling to raise money. (WSJ)
Canada's big five banks bode badly for commercial real estate. They set aside a combined C$3.37bn (US$2.48bn) in credit loss provisions in the first three months of 2023, 13x higher than a year earlier. (Financial Times)
Jolanda Niccolini and Davide Serra attended Bocconi University together and worked together at Algebris Investments. They were known to “speak frankly to each other”, but when Serra's suggestion that Niccolini was in danger of being overcome by a “hormone tempest” and needed to "remain rational" resulted in an award of £32k of damages. (The Times)
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