JPMorgan is cutting 30 percent of its research department, according to two former employees, but the bank is keeping mum about its plans and declined to give details of the cuts.
David DeRose and Leighton Thomas, co-founders of a Bear Stearns alternative research unit that moved to JPMorgan when that bank acquired Bear a year ago, said on Wednesday they sold the unit to an investment firm largely because they could not hire more staff under JPMorgan’s management.
“If you stay under a research division that’s being cut 30 percent, we can’t get any headcount,” said DeRose.
JPMorgan intends to shed 1,000 to 2,000 jobs from its investment bank this year, co-investment bank chief Steve Black said at the bank’s investor day in February.
It was unclear whether the cuts DeRose mentioned are included in these figures and a JPMorgan spokesman declined comment.
Research staff may be an easy target for cuts, since it is hard to quantify their contribution to the bank’s bottom line.
And banks’ research divisions across Wall Street have been shrinking since the Securities and Exchange Commission in 2002 banned firms from using banking fees to pay analysts.
By Elinor Comlay