Merrill Confirms 9,000 Job Cuts, Earnings Charge Of $2.2 Billion
Merrill Lynch & Co., taking strong medicine to deal with a weak market, announced one of the steepest retrenchments on Wall Street in recent years.</br></br>The nation's largest securities firm said it will take a $2.2 billion fourth-quarter charge partly to pay for about 9,000 job cuts it says were necessary to reduce expenses amid a business slowdown. Though the restructuring was expected -- The Wall Street Journal reported on the large potential job cuts and charge in October -- yesterday was the first time Merrill confirmed the move.</br></br>Merrill says the work-force reduction is part of a plan to cut costs by $1.4 billion a year, a move it hopes will boost profitability. Most of the job cuts, representing nearly 14% of its work force, came in the last three months of 2001. In total, the firm cut 15,000 positions in 2000 and now employs about 57,000 people. About $1.2 billion of the charge is related to staff severance costs.</br></br>"The nature of this process we don't anticipate repeating," Thomas Patrick, Merrill's chief financial officer told analysts yesterday in a conference call.</br></br>The charge came as no surprise to investors. In a recent research note, Bear Stearns Cos. analyst Amy Butte predicted a charge of as much as $2.1 billion was in the works. At 4 p.m. in New York Stock Exchange composite trading, Merrill shares were up $1.49, or 2.6%, to $57.93.