10% seems to be the magic number — the latest is venerable DC PE firm The Carlyle Group:
Bloomberg: Carlyle Group, the world’s second- biggest private-equity firm, is cutting 100 jobs, or 10 per cent of its workforce, as the leveraged-buyout business remains stalled.
Some of the cuts will come in the Washington-based firm’s group dedicated to taking U.S. companies private, spokesman Chris Ullman said today in an interview. He declined to be more specific.
“In response to extraordinary market conditions, Carlyle has taken measured steps to balance its cost structure with the current investment climate,” Ullman said. “The firm is well positioned to take good care of our investment portfolio and has the resources to create and respond to compelling investment opportunities.”
It’s actually surprising that the company is cutting only 10% of its staff. Since they’re actually a real private equity company (as opposed to a public-private equity company) we don’t know how much value its lost in the last year, though competitor Blackstone is lost about 75%. We’re guessing Carlyle’s lost somewhere in that ballpark, and the truth is, the old conditions: cheap credit, a steadily increasing stock market, and cov-light lending aren’t coming back anytime soon. In order to actually size the business for the new market, we’re guessing many more cuts are coming back.