Investment bank Bear Stearns will lay off 4% of its staff due to continuing fallout from the summer subprime mortgage crisis, the Associated Press reports.
The elimination of 650 jobs across all departments is the third wave of layoffs at the bank. Bear Stearns cut 300 jobs from its equity trading business and other areas in October and approximately 600 positions from its mortgage-orientation unit.
CEO James E. Cayne has been under scrutiny since Bear Stearns announced the collapse of two hedge funds in July. The company, which is one of the country’s largest underwriters of mortgage bonds, was among the hardest hit on Wall Street after the collapse of subprime mortgage and leveraged loan markets.
In a memorandum to employees, the bank said the current round of job cuts was part of an ongoing review “to best position Bear Stearns for 2008 and beyond.” Affected employees would get severance, benefits and outplacement services, the memo said.