FBR to Cut Workforce Up to 35 Percent
FBR is laying off up to 35 percent of its workforce.
The middle market investment bank is cutting its workforce by 30 to 35 percent as it struggles to stay profitable in a difficult environment.
In an internal memo obtained by CNBC, CEO Rick Hendrix wrote, "Given our view that market challenges are likely to persist for the foreseeable future, we have concluded that we must further reduce our fixed cost base, which unfortunately includes a reduction in our staffing. "
The firm reported its quarterly loss widened to $26.1 million, or 43 cents a share in the third quarter, from 46.6 million, or 10 cents a share, in the year-earlier period, and will hold a conference call Thursday morning to discuss the results. It has lost money in the last three years and reported losses in both the first and second quarters of 2011.
Employees are being notified over the next 24 hours. A person close to the firm said when the layoffs are complete the Arlington, Virginia-based firm's headcount will be in the "high 200s", down from the current 425. The source said move is expected to reduce the firm's fixed costs by more than 35 percent to $90 million from $140 million.
The layoffs will be across the board, though the source said they are concentrated in non-client facing areas, or in the backoffice. Among the client facing areas that will be trimmed, FBR's credit trading business.
FBR has been hurt over the past few years as the credit crisis stemmed the flow of deals that helped to boost its bottom line.
FBR declined comment.