It is understood that up to 600 jobs are at risk.An earlier U.S. push in the 1990s, selling commercial mortgage-backed securities, suffered heavy losses after the 1998 Russian debt crisis.Nomura had already cut hundreds of staff in its European and United States of America equities business in 2012 when equities and fixed income were merged to reform the global markets division, in an attempt to cut costs and improve profitability.
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Reports this morning suggest that anywhere between 500 and 1,000 jobs would be lost, from a total of 5,500 in Europe and the Americas, though the company did not provide a figure. The stock is up 7.79% or $0.32 after the news, hitting $4.43 per share. The company will present more details on the plan when it reports Q4 earnings on April 27.
Nomura reported a ￥50.6 billion pretax loss at its European operations for the nine months to December 31 a year ago. That pared this year’s decline to 29 per cent.
Since the second half of previous year, global markets have experienced extreme volatility and a significant decline in liquidity, triggered by heightened uncertainty in the global economy. A senior Nomura executive referred to the USA cuts as a “deep spring-clean” and said the changes were more a matter of “throttling back a little”. Global market turmoil has affected overseas wholesale business and made it hard to predict when the company could return to profit abroad, he said. In the Americas, Nomura will rationalize certain areas while remaining committed to its core client offerings. “These include brokerage, trading, underwriting, M&A financial advisory services, merchant banking, and development and management of investment trusts and investment advisory services to diversified clients such as individuals, corporations, financial institutions, governments and governmental agencies”. The Japanese firm cut about 60 fixed-income and credit-derivative positions in London past year, a person familiar with the situation said at the time.
It has gone through a series of expansions and contractions outside of Japan over the years as it tried – and failed – to turn a profit overseas.
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Nagai’s retrenchment comes nearly eight years after Nomura bought Lehman Brothers Holdings Inc.’s operations in Europe and Asia.
