(July 7 – 10:00 ET) – The Wall Street Journal is reporting that Merrill Lynch & Co. is looking to eliminate as many as 2,000 jobs from its flagship brokerage division.
The cuts would represent 5.4% of Merrill’s brokerage workforce and would be directed at management, not brokers themselves. The firm is reportedly looking to make cuts in marketing, technology and strategic areas. The cuts could save Merrill US$150 million per year. There’s no word on whether the cuts would affect any of Merrill’s international retail divisions.
The WSJ says these cuts would count as Merrill’s largest mass layoff since 1998, when big bond-market losses and the near collapse of hedge fund Long-Term Capital Management hit the firm. New retail head Stanley O’Neal, tipped to eventually lead Merrill, is reportedly looking to eliminate much of the large bureaucracy built by his predecessor on the retail side.
Yesterday Merrill was a hot stock on the return of rumours of its possible takeover. However the usual suitor, Chase, was replaced in rumours by a possible foreign buyer such as Deutsche Bank. This morning Keefe, Bruyette & Woods downgraded the stock saying the runup is overdone.
-IE Staff