World's No.2 private equity firm Carlyle Group sheds 10 per cent of its workforce

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 (LBO) business remains stalled.

Some of the dismissals come at the Washington-based firm's group dedicated to taking US companies private, spokesman Chris Ullman said today. The layoffs are separate from Carlyle's decision last month to shutter its Central European and Asian leveraged-finance units, which eliminated fewer than 20 jobs.(See: Carlyle shuts offices, raises $14 billion)

Private-equity firms have announced $204 billion of deals in 2008, a 70 per cent decline from the same period a year earlier as banks and investors all but stopped financing new transactions in mid-2007, and a global recession is hurting profits and making it harder for companies laden with debt to repay LBO lenders.

Hawaiian Telcom Communications Inc., which Carlyle bought in 2005, filed for bankruptcy protection earlier this week.

''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.''

He added that a majority of the cuts will be in the back office, like support services staff, throughout the global operations, and the remainder is investment professionals throughout the globe. He said that the exiting employees are receiving ''very solid and generous'' severance packages.

''We conducted a thorough review of all our global operations over the past few months. In light of the market conditions and the lack of deal activity we decided it was necessary to adjust our cost structure - which is both people and other expenses - to reflect the current market conditions and dealscape,'' he said.