(July 19 – 10:25 ET) – Merrill Lynch cutting about 1,800 jobs from its U.S. brokerage business.
Most of the cuts will come from the executive ranks at its New Jersey operations. Brokers will not be terminated. The New York Times is reporting that 900 full-time jobs will go this week, followed later by 400 consultants and independent contractors. Another 500 jobs will be lost through attrition.
Merril is saying the cuts are necessary due to rising brokerage expenses — 25% this year, while revenue is increasing at a 15% rate. The firm is looking to cut costs by more than US$150 million a year.
Yesterday Merrill announced it had a quarterly earnings increase of 34%, as well as an increased dividend. The markets rewarded Merrill with a 2-for-1 stock split. However, traders are now selling the stock based on the news that Merrill’s assets under management have declined and new sales have been slower than rivals such as Charles Schwab.
-IE Staff