(RTTNews) - Wednesday, Reuters reported that JPMorgan Chase & Co
(JPM) intends to cut about 55% or 7,600 employees of Bear Stearns Co.
(BSC), quoting JPMorgan Chief Executive James Dimon. Bear Stearns had 13,834 employees as of Feb 29.
JPMorgan agreed to acquire Bear Stearns on March 17 following the intervention of Federal Reserve, when the investment banker showed signs of bankruptcy.
During the annual shareholder meeting on Tuesday, Dimon said, 'we're retaining 45 percent of Bear Stearns staff.'
Speculations were rife that half of Bear's employees would lose their jobs, while JPMorgan played down the speculations as premature.
Interestingly, Dimon told a bank investor conference last week that about 6,000 Bear employees had received job offers.
According to the report, JPMorgan would extend a total of about 6,300 offers to Bear employees when the review and integration process is completed, and only 200 to 300 employees of those still under review would get offers.
Last week, Dimon said JPMorgan had identified jobs for about 1,500 Bear employees at other companies through a placement network it created.
Reuters quoted Dimon terming the acquisition a 'very risky and tough proposition' and saying 'That's why we say 'Mission: Not accomplished.' Judge us in a year or two.' Nevertheless, the acquisition, to be completed around June 1, is expected to generate a $1 billion second quarter gain for JPMorgan.
JPMorgan is currently trading at $42.48, down $1.22 or 2.79%, while Bear Stearns is trading at $9.36, down $0.25 or 2.60%.
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