More than 120 staff from the European equities division at Donaldson, Lufkin & Jenrette have been made redundant as a result of its acquisition by Credit Suisse First Boston. The redundancies mean that around half of the DLJ equities team is on the street in the biggest layoff in the European equities market in nearly three years. A further 30 or 40 staff in DLJ's equities business outside Europe and the US have also been laid off.
Among those who have lost their jobs are some of the most senior and respected equities professionals in Europe, who have been hired from firms such as Goldman Sachs, UBS Warburg and Deutsche Bank in the past two years. The bill for the redundancies in the wake of the $11.5bn (€13.7bn) acquisition of DLJ will run into tens of millions of pounds for CSFB, particularly as many staff were on two-year deals with equity stakes in DLJ.
CSFB's European equities business, headed by Martin Newson, stressed that in the vast majority of cases, the departures were the result of staff not being offered places, rather than deciding not to join the company. More than 90% of the European equities division staff offered jobs have accepted them.
One senior equities source at CSFB, who declined to be named, said: 'DLJ had a very high-quality pool of talent, but it was not possible to offer everyone a job that we would have liked. In mergers, you have to be sensitive to both sides - not just to the teams that are being taken over.'
He also argued that the addition of more than 100 staff to the European equities business at CSFB would catapult the firm to the top of the rankings in European equities. 'We are not fabricating jobs out of nowhere to accommodate these people,' said the source. It is understood that CSFB, which ranked fourth in European research in the latest Primark Extel survey, now has the second largest equities division of any firm in Europe after ABN Amro.
The head of equities at a rival firm in London said that the 120 DLJ staff represented: 'the foundations of a very strong firm on their own. They were very high on quality and, rarely for a firm, there were virtually no passengers. If they want to, they will get jobs at just about any firm they want.'
The most senior staff at DLJ not to join the new firm is John Smith, head of international equities research at DLJ, who is understood to be taking some time out of the markets. Neither Mark Rutherford, the head of international equity sales at DLJ, nor Val Harrison, head of sales trading, who moved from Goldman, will join CSFB. Smith had been head of equities research at UBS and rolled out the European equities research business at Deutsche Bank before joining DLJ nearly two years ago. Rutherford followed Smith from UBS to Deutsche and then DLJ. They both worked under Hector Sants at UBS and DLJ, where he headed the equities business. Sants has been appointed vice chairman of international equities at CSFB.
The fallout in the equities division is the most severe of any division at DLJ in Europe because the overlap was greatest. Most of the advisory and high-yield debt businesses, where the overall size of the teams was smaller, have joined CSFB.