Adams, Harkness & Hill reorganizes amid dismal market.(Brief Article)

Adams, Harkness & Hill Inc., the Boston investment bank, has shuffled its leadership team and reorganized its equity department less than three months after completing layoffs that slashed its work force by 10 percent.

The company said the latest changes, which included the dismissal and reassignment of investment bankers in critical positions, were aimed at positioning Adams Harkness for a coming economic recovery.

However, the moves also signaled that Adams Harkness -- which earlier this year boasted of plans to grow -- has joined investment banks across the country in responding to dismal capital market conditions by cutting staff, paring costs and shaking up their internal organizations.

Timothy McMahon, the firm's president and chief executive, conceded that Adams Harkness "probably overbuilt in 2000 and had to, for market conditions, retrace in 2001." But, he said, "Could anyone anticipate what the market would be in 2001?"

The firm's hiring strategy came under fire in recent months, with some people suggesting that Adams Harkness badly miscalculated, its ability to grow. "They overhired, over-exposed themselves," said a source familiar with the situation. "They heavily diluted the managing director title. When the organizational chart gets to look like an hourglass, something has to shake out."

Adams Harkness, a boutique firm specializing in so-called emerging-growth companies, has responded by concentrating the consolidation of its equities functions -- arbitrage, corporate client services, institutional sales, over-the-counter trading and sales trading -- into a single group headed by John Tesoro, a managing director who was promoted from director of institutional sales.

McMahon had supervised those functions, but he relinquished direct control of those groups in order to place them under a single umbrella for better coordination.