Analyst Grubman Quits Salomon
Jack Grubman, the Salomon Smith Barney star telecommunications analyst, resigned Thursday amid reports of further investigations into the investment bank's business.

The National Association of Securities Dealers is investigating whether Salomon officials may have handed clients shares of hot initial public offerings into their personal brokerage accounts at below-market prices in order to garner investment-banking business from the clients' companies, according to The Wall Street Journal.

Last month, congressional investigators asked Grubman whether he knew Salomon handed out IPO shares to telecom executives, such as former WorldCom CEO and former client Bernard Ebbers.

Salomon officials familiar with the situation also say that Grubman's departure will help the firm appease regulators and prosecutors who are investigating the company's activities. Grubman reportedly took a $32 million compensation package on his way out.

New Round of Layoffs?
It may be a bit premature, but it's starting to smell like Corporate America is entering a new round of layoffs.

Just in the past week alone, a number of major companies have announced large job cuts, or are recommending creative ways to save money on labor.

For example, IBM said in an SEC filing it canned 15,000 employees, or 5 percent of its workforce.

Meanwhile, communications-equipment maker Agere Systems Inc. on Wednesday said it would cut 4,000 jobs, or more than a third of its workforce.

Also on Wednesday, contract manufacturer Flextronics said it's more than halfway done with its previously announced goal of cutting 10,000 jobs in an attempt to cut costs.

What's more, management at Computer Sciences Corp., the third-largest computer-services company, said it will ask all of its 66,000 workers to volunteer to take at least six months' leave with 20 percent pay. Management at Computer Sciences expects only a few hundred workers to accept the offer, however.

The program allows employees who take the extended leave to receive some income, "and we are able to reduce costs for that time," Frank Pollare, a Computer Sciences spokesman, told Bloomberg.

Cal-Fed told its local employees through a letter that 700 of them will lose their jobs within the next year due to its impending merger with Citigroup, according to a published report.

And Schwab management said it plans to close an Austin, Texas-based call center, which will result in 300 workers losing their jobs. It will also lop off another 75 workers from four other call centers.

It also warned that more layoffs will be announced soon, once the company's management figures out how to cut $200 million in annual operating expenses.

Short Takes

• Wal-Mart Stores Inc. said it would expense stock options beginning in February, the start of its next fiscal year. The impact on earnings per share will be less than 1 cent per share for the year.
  
  

• Pre-Paid Legal Services Inc. said it changed the composition of its board and formed compensation and nominating committees to meet the corporate-governance requirements set by the Sarbanes-Oxley Act of 2002. In a press release, the company's management said four corporate directors resigned.
  
  

• It's official. Thanks to US Airways Group's bankruptcy filing, U.S. corporations set a record for bankruptcies this year, according to BankruptcyData.com. Assets of publicly traded companies filing for bankruptcy have reached $267.6 billion this year, surpassing the previous record of $258.6 billion for all of last year.
  
  

Three of the 10 largest bankruptcies ever came this year. WorldCom Inc., with $103.9 billion in assets, was the largest bankruptcy ever, easily eclipsing the record set last year by Enron Corp., which had $63.3 billion in assets.

• Conseco management said it took a $2.9 billion write-off for goodwill impairment under SFAS 142.
  
  

• Liberty Media Corp. chief executive Robert Bennett said in a conference call Thursday that the company took a second-quarter write-off of $5.1 billion for the value of its shares in publicly traded companies. They included AOL Time Warner Inc., $2.35 billion; News Corp., $1.39 billion; and Sprint PCS Group, $1.04 billion.
  
  

• In a rare jumbo underwriting, SBC Communications Inc., the second-largest local phone company, issued $1 billion in 10-year global notes, led by Deutsche Bank Securities Inc., J.P. Morgan, and Salomon Smith Barney. They were priced to yield 6.081 percent, 200 basis points higher than comparable Treasuries. The issue was rated Aa3 by Moody's and AA-minus by S&P.
  
  

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