Nomura Holdings Inc unveiled plans to cut US$1 billion of costs at its struggling wholesale business, as Japan’s largest securities firm embarks on yet another sweeping overhaul of its international operations.
The company did not give specifics on job cuts as it presented the effort to investors yesterday after the market close in Tokyo.
However, the axe has already begun to fall, with about 100 positions being culled in Europe, the Middle East and Africa on top of reductions in Hong Kong and Singapore, people with knowledge of the matter said.
“To restart this company” as a new Nomura, “I have to commit myself to proceeding quickly with efforts to build a muscular base,” Nomura chief executive officer Koji Nagai told investors.
“We realized that as long as we continue with the way we have done business thus far, Nomura won’t be able to get itself out of the current situation,” he said.
Nagai’s comments, along with the ambitious cost-cutting target, amount to a tacit acknowledgment that Nomura’s years of stop-start international expansions have largely been fruitless. Operations outside Japan have lost money for four straight quarters, with Europe a leading headache for Nagai.
The job cuts in Europe would mostly target rates and credit traders in London, one of the people said, asking not to be identified as the numbers are not public.
Eight out of nine employees in the Singapore equity research operation have been let go, the people said.
Nomura also cut at least 10 jobs at its equities business in Hong Kong, one of the people said.
Nomura said it would “right-size” its wholesale business, which is made up of investment banking and global markets divisions.
Most of the wholesale cost cuts would be completed by March next year, it said.
The company also said it would eliminate at least 30 of its 156 retail brokerage branches dotted across Japan.
Nagai commissioned the review in January after the bank posted its biggest quarterly loss since the global financial crisis, thanks partly to a goodwill writedown on its 2008 acquisition of Lehman Brothers Holdings Inc assets — the deal that hobbled the bank’s European operations.
Nomura also said it would simplify its corporate structure by reducing the number of functions by half. Excluding the internal audit team, Nomura has 10 corporate areas ranging from finance to risk management and compliance. These are to be streamlined into five to avoid duplication and reduce costs.
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