Merrill Lynch cuts 9,000 jobs
By Alan Clendenning
NEW YORK Merrill Lynch & Co., the nation's largest brokerage firm, eliminated 9,000 jobs in the U.S. and overseas during the past year as part of a plan to reduce costs by $1.4 billion amid a slump on Wall Street.
About half the job cuts affect overseas employees and were made after Merrill Lynch decided to scale back operations in Japan and Canada, said company spokesman James Wiggins yesterday.
The remainder of the cutbacks were "scattered around the world," with the largest proportion in the U.S., where most Merrill Lynch employees work, he said. Wiggins declined to specify how many jobs were eliminated in New York, where Merrill Lynch is based.
The company said half the job cuts are from divestitures and discontinued business and half are from voluntary separations and layoffs. The cuts followed 6,000 job eliminations earlier last year, meaning Merrill reduced its work force by 21 percent in 2001 ending 2001 with 57,000 employees, down from 72,000.
In a conference call with investors, top Merrill Lynch officials insisted that the cuts will not affect the company's ability to squeeze out profits in a tough market environment, or limit it from taking advantage of an expected economic turnaround later this year.
The job reductions were "extremely targeted and disciplined to avoid cutting into muscle of organization," said Merrill Lynch chairman and chief executive David H. Komansky.
Other brokerage firms also cut thousands of jobs last year because of the steep stock market decline, which cut brokerage fees and sharply reduced revenue generated by arranging mergers and acquisition deals and helping companies issue new stock.
The cuts at Merrill Lynch will result in a pretax charge of $2.2 billion against the company's earnings in the recently completed fourth quarter.
Merrill Lynch also forecast that its earnings before charges would be between 48 cents and 50 cents a share for the fourth quarter and that revenues would be 8 percent below what it reported for the third quarter of 2001.
Analysts surveyed by Thomson Financial/First Call had expected Merrill to report earnings of 48 cents a share for the last three months of 2001.
Other components of the charge being taken in the fourth quarter include consolidation of the company's private client offices in the U.S., Europe, Asia and Australia and writedowns of certain technology assets.
Earlier yesterday, the company's Japanese unit, Merrill Lynch Japan Securities Co., said it will shed 1,200 jobs and close 20 of its 28 branch offices to scale back its money-losing retail operations. Those job cuts are included in the 9,000 overall figure.
All of the affected employees outside Japan have been informed, Merrill officials said, and the vast majority of the cuts have already occurred.