Investment banking firm Bear Stearns will have to make 650 workers redundant, after expecting to lose more money on the sub-prime mortgage crisis.
The firm will cut a further 4% of its work force, after already losing 1,490 staff since August 2007. The latest cuts will affect employees across the globe, including those in New York and London.
Bear Stearns’ fourth quarter results reveal a $1.2 billion writedown directly due to sub-prime losses, while the bank was $563 million profit for the same period last year.
Reuters predicts that the firm will lose $1.36 per share in the final quarter – the equivalent of $200 million.Bear Stearns has had a difficult year, with shares down 39% and the collapse of two hedge funds in the summer, which resulted in the departure of co-president Warren Spector.
“As we indicated at the end of October, we are continuing to rationalize our business, monitor staffing needs and align our infrastructure with current market conditions,” says the bank in a statement.