The Globe and Mail reports in its Tuesday, Feb. 3, edition that Canaccord Genuity Group ($6.30)
plans to cut 4
per cent of its staff, blaming "market
conditions" for the layoffs.
The Globe's Bertrand Marotte and Niall McGee write that about 80 out of Canaccord's
2,018 staff will lose their
jobs. The cuts will
mostly affect its operations in
Britain, Europe and the United
States. It will incur a $22-million charge related to the
layoffs.
Canaccord was mum on what it meant by
"market conditions." The
company's heavy exposure to the
energy sector is a concern.
Over the past three years, about
15 per cent of Canaccord's investment
banking revenue was directly
tied to the energy sector,
according to Bank of Nova Scotia analyst Sumit Malhotra.
The S&P/TSX capped energy index
is down about 30 per cent
since July, 2014. Canaccord shares
have lost about half their value in
the same period.
Mr. Malhotra says, "This is not exactly the type of
environment that has either companies
or their investors thinking
'bought deal,' and the deterioration
in the capital markets environment
has had a clear negative
impact on activity levels and operating
conditions for the broker-dealer sector."
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