Staff at Cazenove are bracing themselves for the first programme of redundancies at the firm after it laid off a handful of staff in Hong Kong and Europe.
Cazenove, which relies on UK equities and M&A for the bulk of its revenues, is looking hard at how to reduce costs in the face of the market downturn. It has not ruled out making significant staff cuts for the first time in its 178-year history as a private partnership. One source at the firm said: 'It is unlike the firm to cut staff and it has held off, but it seems inevitable.'
Senior sources at Cazenove concede that the firm is looking hard at its costs, but stressed that no firm decision had been taken. 'We would be in a minority of one if we were not looking at costs,' one source said. Cazenove last week confirmed that it had fired 10 equities staff in Hong Kong and a handful in the UK.
Any cutbacks will not affect its recent expansion into continental Europe. Last month, Cazenove hired Alexander Klemm from UBS Warburg in Frankfurt to launch its German business. It is understood to be looking for about 12 bankers.
Cazenove insists it is still on track to become a publicly listed company by the end of next year, despite the sharp fall in activity and revenues at the firm.
The collapse in the new issues and M&A business has hit the firm particularly hard, largely because it does not have the counterbalance of a strong fixed-income or derivatives business. Last week, the firm denied speculation that it was looking for a buyer. 'We do not comment on speculation, but the proposed IPO by the end of next year is still on.'
It also played down speculation that its relationship with Soundview Technology, the US-owned technology investment bank, in which Cazenove owns more than 18%, had gone sour. Cazenove bought 10.3% of the then Wit Soundview Europe for about €17m ($16m) in March last year, just two days before the technology bubble burst.