Cost cutting: Nomura lays off several employees in India
Over 100 employees are being given the pink slip as part of a worldwide cost-cutting drive and this involves employees at several levels - from the top down to the middle and bottom.
Job cuts at Nomura Holdings, Japan's largest brokerage, have begun biting hard in India. Firstpost understands that nearly 100 employees of Nomura in India are being given the pink slip as part of a worldwide cost-cutting drive and this involves employees at several levels - from the top down to the middle and bottom.
However, a Nomura spokesperson denied the number and said the figure was "significantly less and amounts to only 2 percent of its employees in India."
"We are not providing details of individuals. However, at the time of its second quarter results, Nomura announced its intention to reduce its cost run rate by $1.2bn, and we are in the process of executing that plan as quickly as possible. Nomura possesses deep bench strength and remains fully committed to the market, "? said Nandini Goswami, Head, Corporate Communications, Nomura India.
Three years after the global financial crisis nearly brought Wall Street to the brink, large banks are struggling to keep their heads above water and some are on the verge of going bust all over again - thanks now to the crisis in the eurozone. This time heads are rolling not only at the top, but the young are also losing both cash and cachet.
At Nomura, The Wall Street Journal had reported earlier this week that it had laid of at least six to seven people from its Mumbai branch, including its local investment banking head and the India chief of equity markets since late September.
However, the layoffs now include middle-level people across the firm's investment banking, equities, derivatives and IT businesses. Moreover, those employed on a contract have been just given a month's notice, while the remaining have been asked to leave the company with effect from 1 December 2011.
The Japanese bank posted its first quarterly loss in two-and-a-half years earlier last month due to a slump in investment banking revenues and tripled its cost-cutting target to $1.2 billion to cope with the tough market conditions.
The layoff process has started in Europe and Asia and "there could be more job cuts over the next few days in this region," a company source with knowledge of the changes in Nomura India headcount told Reuters.
As Europe's sovereign debt crisis intensifies , the Tokyo-based bank is trimming expenses and slashing assets linked to Italy and Southern European nations to not only pare losses but to also avoid a possible downgrade by credit rating agency Moody's. The bank has cut its exposure to Italian government bonds and other Italian securities to $467 million from $2.82 billion in less than two months to reduce its risk in the region's debt crisis.
Nomura vies with its global rivals Citigroup, Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch for a slice of the Indian investment banking market, which has seen a sharp plunge this year.
With no solution to the eurozone crisis, banks are likely to scale back operations and job cuts are on the radar for investment banks. Other foreign banks financial institutions like Credit Suisse, Macquarie Group, Bank of America and Daiwa Securities have also retrenched staff in Asia recently. While Credit Suisse has reduced workers in its Indian wealth management unit by 20 percent, HSBC plans to axe around 3,000 jobs in its Asia operations in Hong Kong.
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The employees in India have largely been spared of these layoffs, although most of these companies have significant presence in the country.