Wall St. cuts perks with writedowns, layoffs

Multibillion dollar write-downs have forced trading desk heads and senior bankers to chip away at small comforts to reduce expenses and strengthen the bottom line.

Just ask Ron Karp, a controller at Corporate Transportation Group, which provides rides home to Wall Streeters working late.

"The phone doesn't ring as much as it used to. If you're firing people you're not going to send them around in limos," Karp said. The slowdown has been visible over the past month at car services city-wide, he added.

Cutbacks are happening in individual departments, rather than companywide as seen early this decade after the tech bubble burst.

But affected employees feel the pinch anyway. Credit Suisse has reduced some cell phone subsidies and done away with car vouchers. Merrill Lynch has banned business class travel for some divisions, Goldman Sachs has pulled free soda, and JPMorgan has upped the requirements for free meals and car rides.

Slashing small perks cuts costs, but more importantly it signals that workers should keep expenses down in areas under their control. "Banks cut perks to reinforce to employees that the firm's under pressure," Brad Hintz, an equity analyst at Sanford C. Bernstein, said. "It tells people to use their heads and watch expenses."

A HARSH CLIMATE

Financial institutions have announced more than $300 billion of write-downs, losses and credit provisions since mid-2007.

That has spurred big layoffs, including over 23,000 announced in April, with about half the cuts coming out of Merrill Lynch and Citigroup, according to a report by Challenger, Gray & Christmas, Inc.