DAVY STOCKBROKERS is retrenching for a second time in less than a year, cutting pay across the board and eliminating 12 jobs.

Staff throughout the business will have their pay cut by 8¼ per cent. Davy declined last night to disclose the size of its remuneration bill.

The latest pay retrenchment cuts deeper than a round of cuts last July. Annual earnings above €50,000 were cut by 5 per cent at that time, but pay below €50,000 was not reduced.

The new job cuts, which will bring the total staffing level in the business down to 440, follow the elimination of up to 75 positions in July. At the time, the cuts represented about 15 per cent of Davy’s workforce.

“Given the current environment, the company has concluded that tight cost management is in the best interest of all stakeholders,” said a spokesman. “This is a prudent measure designed to maintain profitability.”

By implication, this remark suggests Davy expects to turn a profit this year, in spite of a reduction in trading volumes on the Irish Stock Exchange.

Having told stakeholders last October that Davy made pre-tax profits of more than €30 million in the first half of 2008, the company is understood to have been profitable for the entire year.

It is understood that qualifying staff received bonuses in respect of the firm’s performance last year “at an appropriate level”.

About 100 Davy staff took a stake in the business when a management team led by chief executive Tony Garry and capital markets head Kyran McLoughlin bought the firm from Bank of Ireland in late 2006.

The management group paid €316.55 million for the 90.44 per cent of the Davy that was not already held by the firm’s board.

The transaction, funded by Anglo Irish Bank, valued the business at €350 million. Mr Garry said last autumn that Davy’s net assets stood at €140 million, “representing more than three times our regulatory capital requirement”.

In a separate development expected today, PricewaterhouseCoopers will brief staff about the company’s performance. A spokeswoman for the accountancy firm said there would be no announcement on jobs or redundancies as a result of the meeting, which she said was a routine update for staff.

She declined to comment on speculation that the company was seeking a 5-10 per cent pay cut for low to middle managerial staff.