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Firms Preparing to Restructure

Corporations are redesigning their structures to reduce costs further.

In many sectors, the economic recovery has proved to be anything but, and as a result, many companies worldwide have been forced to continue cutting costs and paring back operations and employees. The financial services sector is not immune to this trend.

Bloomberg reports that some of

In many sectors, the economic recovery has proved to be anything but, and as a result, many companies worldwide have been forced to continue cutting costs and paring back operations and employees. The financial services sector is not immune to this trend.

Bloomberg reports that some of the biggest names in European investment banking have been unloading workers and assets in an attempt to offset lingering market woes.

Groups such as Credit Suisse, Deutsche Bank, UBS and Barclays could well announce layoffs and sell businesses, JPMorgan and Chase analyst Kian Abouhossein told the news source.

"Everybody is trying to reduce risk-weighted assets as soon as possible," said Abouhossein. "They've already all started, but they'll probably find it harder than expected because the environment is clearly getting tougher."

Increased action from regulators has also forced some companies to consider restructuring, BusinessWeek reports. Mortgage insurer PMI Group has been under scrutiny from regulators, and as a result it is hoping a new business plan will turn around its profitability and put an end to its 16-quarter streak of losses.

The Wall Street Journal reports that this trend is continuing as more executives seek to reduce their operating expenses and make their enterprises more efficient in anticipation of difficult times in the future. Danaher Corporation alone plans to put aside $100 million for its restructuring budget in the fourth quarter. 

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