First Boston Restructuring; 550 to Be Cut
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NEW YORK — First Boston Inc., one of Wall Street’s big investment houses, Thursday announced sweeping organizational changes meant to streamline its diverse operations.
Concerned about increasing overhead and large pre-crash and post-crash trading losses, First Boston already has begun layoffs, which a senior official told Dow Jones News Service will “easily” total 10% of the staff, or at least 550 people.
The restructuring, which had been contemplated well before the October stock market crash, calls for other major organizational changes, such as a merger of its corporate finance and investment banking operations under the management of its mergers-and-acquisitions stars, Bruce Wasserstein and Joe Perella.
The two divisions were said to have been at loggerheads frequently, with the mergers-and-acquisitions department gaining power and customers at the corporate finance group’s expense.
First Boston also said it would establish a new bond department. The firm in June said it had been hit with a loss estimated at $100 million from trading in Treasury bond options.
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