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Macquarie Group’s ‘Millionaire’s Factory’ suffers amid mass layoffs

Judging by the flood of news late Wednesday about mass sackings across Macquarie Group (ASX:MQG), the investment bank’s interim results on Friday must be very grim.

According to reports on the Financial Review website, Macquarie’s unexpected layoffs have left staff on edge.

“Employees across the company’s banking and financial services arm have been called into meetings and sacked on the spot, as reported by the AFR,” the paper stated.

The sackings have been ongoing for two weeks in some areas, and in others, they have occurred just in the past day or so.

Sales, business development employees, and individuals working in contact centers focused on the bank’s investment platform, Macquarie Wrap, have been let go in the past two weeks.

“Employees in banking and financial services have been called into meetings, sacked on the spot, and asked to leave immediately,” the paper reported.

In early September, Macquarie issued its second downgrade in six weeks, following the downgrade at the bank’s annual meeting in late July. This update came ahead of the bank’s first half ending on September 30.

The July update revealed “weaker trading conditions, with first-quarter 2023-24 Operating Group contribution substantially down from the prior corresponding period.”

The asset management division, managing approximately $864 billion, still expects base fees to be largely in line with last year. However, a global dip in valuations has made it challenging for companies to sell assets.

Macquarie Asset Management reported a substantial decline in its Net Other Operating Income, primarily due to lower investment-related income from green energy investments, with asset realizations mainly in the six months to next March 31.

Macquarie Group’s asset management arm adjusted its short-term outlook, expecting returns from potential asset sales to be delayed into the second half of its 2023-24 financial year.

The bank earned a first-half profit of $2.3 billion in the six months to September 30, 2022.

On Wednesday, MQG shares fell 0.6% to $160.02, marking their lowest point in over a year. They are down 5.4% over the last 12 months and 4.1% year-to-date, exceeding the 1.55% year-to-date drop in the ASX 200 up to Wednesday’s close.

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