April 28, 2023

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Lazard Ltd, a global financial advisory and asset management firm, has announced its plan to lay off 10% of its workforce as a response to the slowdown in M&A activity, resulting in significantly lower revenues in the first quarter. The decision was made to right-size for the current environment and provide flexibility to strategically invest in their business.

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Cost-saving Initiatives to Impact Q1 Expenses and Future Charge

The cost-saving initiatives resulted in an expense of $21 million in Q1, and the company is expecting an additional charge of around $95 million. Despite this, Chairman and CEO Kenneth M. Jacobs said, “We are implementing cost-saving initiatives to right-size for the current environment and provide flexibility to strategically invest in our business.”

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Q1 Results Fall Short of Expectations

The Q1 adjusted EPS of -$0.26 was much lower than the average analyst estimate of $0.26. It plunged from $0.69 in the prior quarter and $1.05 a year before. Operating revenue of $527 million was also trailing the $549.6 million consensus, down from $712.4 million in Q4 2022 and $699 million in the year-earlier quarter.

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Financial Advisory Business Suffers While Asset Management Revenue Rises

Revenue for its Financial Advisory business was $274 million for the quarter ended March 31, down from $403.8 million for the quarter ended Dec. 31, 2022, and from $388 million in Q1 of last year. However, Asset Management revenue rose to $265 million from $259 million in the previous quarter but slid from $312 million a year ago.

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Assets Under Management Show Mixed Results

Assets under management stood at $232 billion at the end of Q1, up from $216.1 billion at Q4 2022 but down 8% from Q1 2022.

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Operating Expenses Show a Slight Decrease

Operating expenses totaled $579.4 million compared with $639.2 million in Q4 2022 and $535.2 million in the year-ago period.

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Lazard's Shares Dip in Premarket Trading

Lazard's announcement of cost-saving initiatives led to a 1.7% dip in premarket trading.

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Members of LevelFields received the alert of this event on April 27, 8:45 AM ET

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