Big regional investment house Mirae Asset Financial shocked its clients and employees in Hong Kong yesterday, as sources said it will close down its brokerage in the city to save costs amid poor market conditions.
Employees at Mirae Asset Securities' Hong Kong branch were asked to attend an emergency meeting yesterday morning, at which they were informed of the South Korean group's decision to close the China-related securities business operating in its Hong Kong office, two employees who lost their jobs said.
"Basically, the information we got is clear - that our Hong Kong office will be shut down and it's time to go," said one of the employees, who declined to be identified as they were not authorised to speak to the media.
Mirae Asset Securities employs about 40 people in its Hong Kong office. Most of the jobs based in the city will be cut. A few South Korean employees may be asked to return to head office in Seoul to take up other positions, the sources said.
They said a handful of senior executives remaining in Hong Kong would deal with follow-up matters related to the closure of the office.
"The senior executives explained to us that we cannot break even in our securities business in Hong Kong. To save costs, we have been let go," said another employee. "They may keep just a few people in Hong Kong to symbolically maintain contact with Seoul."
Mirae Asset Global Investments (Hong Kong), the local asset management business of the group, remains intact. Mirae Asset Global Investments is a major institutional investor in many Asian markets.
Employees affected at Mirae Asset Securities' Hong Kong office include traders and staff from the research and sales departments and back office. They said most of the affected employees got a month's salary as compensation.
In an e-mailed statement, the company said it would restructure the Hong Kong operation of Mirae Asset Securities and that the restructuring would involve "some reduction of staff numbers", without giving a specific figure.
"The move to restructure Mirae Asset Securities Hong Kong reflects the current decline in global brokerage market activity," the company said.
It insisted its Hong Kong unit would remain active, although the sources said most sales and research professionals would be laid off.
Mirae's move is the latest in a series of job cuts to batter the industry. Thousands of positions have been slashed across Asia in the past year at major financial institutions such as Daiwa Securities, Nomura, HSBC and Citigroup.
Last year, Samsung Securities ceased running its Hong Kong- and China-related brokerage service at its Hong Kong office to focus on its home market.