SG Securities axes half of London equity research staff

SG Securities has laid off more than half its research analysts in London in a swathe of job cuts aimed at halting the slide in profits at its French parent, Société Générale.

SG, the corporate and investment banking arm of the French group, is cutting more than 100 staff across the London business out of 2,000, as it retrenches its European operations. But it was the scale of the cutbacks in the research side that shocked the City yesterday.

The bank will be left with a skeleton staff of about 25 analysts, compared with 78 previously, according to some of the departing staff. SocGen refused to confirm the exact numbers.

Several of the bank's most high profile staff have been laid off. They include the veteran retail analyst Nick Bubb, telecoms specialists Jim McCafferty and Tressan MacCarthy, and Peter Davey, who covered the mining sector.

One departing analyst said there was a mood of anger at the scale of the cuts imposed from Paris. "They said they wanted to build up a London presence and now this. It's hard not to feel let down."

SocGen announced earlier this week that a total of 200 jobs would go at its operations in London, Madrid and Milan. On Thursday, the company revealed profits in the third quarter of the year had fallen by 63 per cent through a combination of falling investment banking revenue and losses on investments in troubled companies including Alcatel, the telecoms equipment maker, and Vivendi Universal. The job cuts will cost SocGen €27m (£17.2m), but save it €42m from next year.

Alain Bataille, the UK head for SocGen, said there would be no substantial reduction in research coverage of the London market, although some smaller companies may be dropped. He described the job losses in corporate finance, estimated at more than 50, as "a pruning exercise".

He said: "We have to adjust to the market, and the equity market is a shambles. We are not like an American bank that is going to lay off 2,000 people in one go, but we do look to see areas where we do not make enough profit.

"We are more than ever committed to the London market. It is the second centre of gravity for SocGen in Europe and we will not reduce our corporate activity in the UK – just the reverse."