Week in Review: Swinging the axe at Bear, JP, Morgan Stanley, Calyon, Natixis and UBS

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There were lots more redundancies last week. Everyone from managing directors (Morgan Stanley) to associates (UBS) felt the steel.

Bear Stearns continued to feel the pain of integration with JPMorgan. Reuters said JP has made job offers to only 6,000 of Bear's 14,000 staff. Dealbreaker said they were being offered less than they got at Bear.

JPMorgan was also said to be closing or spinning off most of Bear's asset management arm, at a cost of up to 400 jobs. Private client brokerage staff were lopped in Hong Kong and London.

JPMorgan said it would cost $9bn to clean up Bear Stearns and restructure its balance sheet.

Bloomberg reported that JPMorgan plans to forcibly remove 4,000 of its own employees, 2,000 of whom will be replaced with people from Bear Stearns.

Morgan Stanley proceeded with plans to eliminate 1,500 staff. Senior equity researchers were eradicated. The bank was expected to axe 350 jobs in the City.

UBS was said to have laid off laid off three quarters of the Wharton MBA graduates it's hired recently, according to an entirely unsubstantiated rumour on Dealbreaker.

UBS chairman and chief exec Jerker Johannson emerged as the hatchet man behind the bank's recent layoffs when he revealed that he'd personally insisted on thousands of job losses and said headcount will be cut by as much as 50% in some areas of fixed income.

Barclays announced its Q1 results, including a 1bn writedown on ABS and

"other credit related securities". No immediate capital raising was announced, but some say the bank is thinly capitalised, making this inevitable.

Thin capitalisation didn't stop Barclays poaching a team of M&A bankers from ABN AMRO.

Calyon announced that it will now be known as Crédit Agricole and revealed plans to sell €5bn of assets and make a €5.9bn rights issue to cover subprime losses. It also plans to refocus on retail banking, and dumped chief exec Marc Litzler, who'd led its investment banking push.

SocGen made another €1.18bn writedown and said profits fell 23% in Q1.

Bradford & Bingley said it plans to raise 300m from shareholders, despite previously denying it had any intention of doing so. Its shares plummeted.

The credit crunch continued, although Baudouin Prot and Jamie Dimon said it's nearly over (Dimon added that the post-crunch slump will persist into 2010</a.

Following writedowns at Barclays, French banks,

Fortis and Alliance & Leicester, Financial News said total writedowns had reached $192bn. Fitch said banks have now written off 80% of their losses related to subprime.

Libor leapt to 5.84% and banks tried to borrow 78.3bn from the Bank of England, which only had 13.7bn on offer. Total borrowing from the BoE is now said to stand at $30bn. Meanwhile, there were claims that Libor is being misquoted.

Mervyn King said the nice decade is over, that we're now in for two years of pain, and that UK interest rates won't fall until 2010.</a

In the US, however, banks' appetites for the Fed's lending facility were diminished. Bernanke, nevertheless, said he was ready to boost Treasury auctions to more than $150bn if necessary. He also urged banks to raise more capital just to be on the safe side.

Bright spots did exist. Distressed debt investing received a boost when it emerged that Morgan Stanley is raising a $10bn fund to invest in distressed real estate. Drum Capital was said to be launching a more diminutive $500m fund. And Blackstone contemplated buying back some of the distressed property assets it dumped last year.

If you can't get a job in distressed debt, there are always alternatives. Oxbridge Investment Banking is said to be paying bankers 40-200 an hour to help students land jobs in the City.