(March 7) – “Bear Stearns Cos., seeking to slash costs, said it is laying off 400 people, or about 3.6% of its work force,” writes Cheryl Munk in today’s Wall Street Journal.

“Officials at the firm said the cuts will affect a number of business units, including its sales and trading operations. About half of the job cuts will come from the firm’s information-technology group. Most of the employees targeted under the layoffs were informed Tuesday that they no longer had a job.”

“The layoffs come as Wall Street continues to suffer from a profit drought amid a turbulent stock market. In recent months, many top Wall Street firms have begun to slash costs and eliminate positions as the falling stock market, particularly the technology-heavy Nasdaq Stock Market, has put a halt on the Wall Street profit machine.”

“Tuesday, Sam Molinaro, chief financial officer, suggested that Bear Stearns won’t meet first-quarter earnings estimates of $1.38 a share. Bear Stearns is scheduled to release its operating results later this month.”

“Mr. Molinaro, however, said the job cuts aren’t a reaction to the dour Wall Street business environment. Indeed, Bear Stearns has been looking at ways to reduce costs for several months, he said. In December, it announced the elimination of about 60 positions as part of that effort.”

” ‘The people that were let go today were a function of an initiative that we’ve had going on here since last summer,’ Mr. Molinaro said. ‘This is part of a cost-rationalization program that we’ve had going on for the past six months.’ He declined to comment on how much first-quarter earnings may fall short of estimates.”

“Officials at the firm say the layoffs will generate annual savings of about $30 million, but that the firm will take a one-time charge of about $8 million after the first quarter. Officials at the firm are also leaving open the possibility that they may announce further cuts down the road.”

“For Bear Stearns, the cutbacks are big news. Even through the roughest economic downturns, the firm historically has tried to avoid layoffs. In November 1987, about a month after the stock-market crash, Alan ‘Ace’ Greenberg, Bear Stearns’s former chief executive and now chairman, boasted in an internal memorandum that Bear is ‘hiring instead of firing’ even as other competitors were looking to slash staff. Indeed, some firm officials said they couldn’t remember the last time Bear Stearns cut staff so severely”