John Thain never really managed to live down the revelation that he’d revamped his office with a $35k commode, an $87k ‘area rug’ and various other knick-knacks when he he joined Bank of America in 2008. Thain’s decorative moves were seen as deeply out of touch at a time when the bank was struggling to surmount the financial crisis.
Now, at a time when Bank of America is engaged in its ‘New Bac’ cost cutting initiative which aims to cut 11% of costs from targeted areas, including the investment bank, rumours of a new decorative scandal are swirling around the City. Allegedly, a senior executive at BAML in London has submitted an application for a £750k office revamp. In the current climate, this is said to be causing problems internally – particularly given that bank has been taking suggestions from employees on how to cut expenditure.
“It’s not as if there’s even anything wrong with that office,” says one headhunter. “It’s in the building on King Edward Street, which is still very new.”
A spokesman for Bank of America denied there’s anything untoward happening with regards to offices for its senior staff, however. “There would need to be a very good reason for spending a lot of money on an office,” he said. This would apply to everyone: “It wouldn’t matter who you are.”
More redundancies at Citigroup and Jefferies?
Meanwhile, there are also rumours of further redundancies. Cuts at Citigroup are said to be on the cards. Covert cuts at Jefferies are said to have happened already.
One fixed income headhunter alleges Citigroup is planning more redundancies soon. And someone posted the following comment in relation to Jefferies yesterday:
‘Jefferies Investment Banking (M&A, DCM, ECM, sector teams) going through a big cost cutting in London and Germany this week. 18 people cut in the last 3 days, which is a reasonable % of employees.’
“There are going to be a lot more cuts in September, once the Olympics are over,” says a headhunter quietly.