A.G. Edwards is reducing its workforce through voluntary retirement and attrition because of diminishing revenue, the firm announced today. Yet brokers will not be directly affected by the move, according to producers from the firm.
The job cuts will come from non-branch personnel "not employed" in any of the firm's 705 retail branches, a firm spokesperson says.
"We're all affected by this move, just not directly," says an A.G. Edwards Midwest-based producer.
"We're not pulling a Merrill Lynch or Smith Barney by wiping out 15% of our workforce, including brokers," says an A.G. Edwards producer on the West Coast. "Because we're a down-home, conservative firm, unlike the wirehouses, we weren't hit nearly as hard as they were [by current market conditions]. We never got into the dot-com craze like Merrill, Smith Barney and the others. So we haven't taken the hit they have. We're very fortunate."
Still, the ramifications of the depressed market and the aftermath of the tragic Sept. 11 terrorist attacks has hurt A.G. Edwards to the point where it has to make cost-cutting moves.
"From a compensation standpoint, we're not affected by these cuts, and neither are our sales assistants, cashiers or clerks," says the West Coast-based rep. "But we are affected in that calls we make to St. Louis may not be returned as quickly as before. So, if a client calls me and wants to get some information immediately in regards to his account, I might not be able to provide that information as rapidly as he needs it, and that is how it adversely affects us."
Besides workforce reductions, A.G. Edwards' overall fixed costs will be decreased through real estate holdings and ongoing cost-containment measures, the firm says.
Additionally, consideration of salary increases will be deferred until at least the middle of the firm's next fiscal year.
A.G. Edwards announced this morning that its net earnings for the quarter ending November 30, 2001 were $22.2 million, a sharp reduction compared to the $57.2 million in net earnings during the same quarter last year. By reducing non-branch salary expense by approximately eight percent, the firm will cut an estimated $21 million on an annual basis.
"Unfortunately, these difficult decisions are necessary in light of business conditions," A.G. Edwards CEO Robert Bagby said in a statement. "We are taking these actions now to ensure A.G. Edwards' profitability, strength and independence for the future."