LAZARD plans to cut $125m (£77.5m) in annual costs, mainly through staff reductions, the investment bank said yesterday, as it works to meet an aggressive profit goal in a weak market for its financial advisory services.
Lazard announced the cost-cutting target – which represents 7.8 per cent of its operating expenses last year – as it reported a sharp decline in third-quarter earnings. Its shares rose more than four per cent.
Higher costs, mainly from increased compensation, and lower revenue from advising companies on mergers and acquisitions have squeezed Lazard’s bottom line.
Lazard reported third-quarter earnings of $33m, or 26 cents per share, down 47 per cent from $63m, or 49 cents per share, a year earlier.
Even if revenue does not improve, Lazard plans to meet its target through cost-cutting, Jacobs said. About two-thirds of the $125m in expense reductions will come from compensation, primarily through staff cuts, although he did not rule out the possibility of a lower bonus pool at the end of the year, too.
City A.M. Reporter