Piper Jaffray to Cut Up to 30 Jobs; Profits Remain Low

The company might also consider reducing its office space in an attempt to cut costs.

After a steep decline in first-quarter profits, Piper Jaffray Companies announced Wednesday that it plans to reduce its work force by 2 percent to 3 percent-or up to 30 employees.

During a Wednesday conference call with investors, Piper Jaffray Chief Financial Officer Debbra Schoneman said that the company will also consider reducing its office space in an attempt to cut costs.

Schoneman said both measures will increase the profitability of the company and “improve our ability to increase the margin of our business.”

For the first quarter, the Minneapolis-based investment bank and asset management firm reported net income of $2.9 million-down almost 60 percent from $7.2 million in the first quarter of 2011. Revenues for the quarter totaled $117.7 million, down almost 6 percent compared to $124.8 million a year ago.

Piper Jaffray CEO Andrew Duff said during Wednesday's call that the company and the industry as a whole have experienced a decline in the volume of U.S. clients. He added that Piper Jaffray's revenues from mergers and acquisitions were down because fewer deals closed during the quarter as compared to most quarters.

But the company's first-quarter results represented an improvement from the end of last year. In the fourth quarter of 2011, Piper Jaffray reported a net loss of $116.4 million and revenue totaling $99.2 million.

“Against a more positive operating environment, we were pleased with our improved first-quarter results,” Duff said in a statement. “Stronger fixed-income sales and trading and equity financing revenues, and solid asset management and public finance results, drove the improved performance.”

Duff said during the conference call that while he is reasonably optimistic about the business, the markets are still in the early stages of recovery and market conditions can change rapidly.

The layoffs will cost Piper Jaffray $4 million to $5 million in the second quarter, including severance and non-compensation expenses.

Piper Jaffray is among Minnesota's 50-largest public companies based on annual revenue, which totaled $458 million in 2011.