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NEW YORK, US - WACHOVIA Chief Executive Kennedy Lewis on Monday told investors his hard-hit United States regional bank was cutting back corporate and investment bank jobs to reduce costs amid the ongoing market slump.
The Charlotte, North Carolina, bank plans to cut a third of its fixed-income headcount, as well as a 10 per cent reduction in corporate and investment bank support staff, Mr Lewis said at a UBS bank investor conference.
Wachovia, which marked down fixed income assets by US$5 billion (S$7 billion) so far in the credit crunch, is 'exiting non-client-driven businesses', Mr Lewis said. The comment echoes moves made by other firms, where mortgage and debt trading businesses generated the bulk of losses.
'Many structured product businesses are gone. Any business with leverage on top of leverage will not be part of our model going forward,' he said.
A bank spokeswoman could not immediately say whether the cuts were the same as some 500 investment bank job reductions disclosed last month during a first quarter conference call.
At that time, Chief Financial Officer Tom Wurtz said headcount in global markets and investment banking had been reduced by 14 per cent this year and would be cut an additional 12 per cent during the second quarter.
Combined, these moves will eliminate one of four capital markets and investment banking jobs, the bank said. -- REUTERS
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