NEW YORK (CNNfn) - Donaldson Lufkin & Jenrette plans to lay off approximately 25 percent, or up to 300, of the employees in its equity group in preparation for its merger with Credit Suisse Group, sources close to the bank said Wednesday.|
Nearly 75 percent of the equity group's 1,000 people will be asked to stay on, but the rest will be given no indication that their positions are secure, sources said. Those that are not asked to stay will soon realize they will not remain at DLJ, sources said.
DLJ began the process of asking certain members of the equity group to stay last week, sources said, and will not formally begin laying off people until mid-October.
Some of those being asked to stay are being offered lesser positions, a source said.
"It's depressing," said one DLJ employee who was asked to stay. "Three weeks ago we were dominating and suddenly the firm is obliterated. There's no loyalty right now."
Credit Suisse First Boston declined to comment. DLJ could not be reached for comment.
The DLJ layoffs come as Chase Manhattan Corp., which acquired J.P. Morgan last week, disclosed that the global merger would lead to fewer than 3,000 job cuts worldwide.
Chase (CMB: Research, Estimates), the No. 3 U.S. bank holding company, said last week it would buy J.P. Morgan (JPM: Research, Estimates), the No. 5 U.S. bank, for about $35 billion in stock.
Chase's layoff estimates are much lower than the 10,000 job cuts reported by the media late last week.
Credit Suisse is sticking by its original estimates. In August, the Swiss banking organization agreed to buy DLJ (DLJ: Research, Estimates) for $11.5 billion. At the time of the transaction, the banks said that potential overlaps created by the merger would lead to a loss of jobs for about 10 percent, or 2,600, of the combined work force.
Published reports pegged the DLJ layoffs at 50 percent-to-60 percent of the bank's equity group.
DLJ's equities group is comprised of institutional investing, research, trading and stock sales. Typically, in a merger between two brokerages, considerable employee duplication exists in these areas.
DLJ gained 16 cents to $88.94, Chase slid by 56 cents to $46.31, and J.P. Morgan lost 75 cents to $164.99 in midday trading Wednesday.