MERRILL CUTS SUBPRIME JOBS
September 18, 2007 -- Merrill Lynch, which bought subprime mortgage lender First Franklin Financial Corp. only nine months ago for $1.3 billion, is cutting jobs at the unit as the U.S. home-loan market swoons.
Staffing was reduced "to be in line with current business requirements," said Bill Halldin, a spokesman for Merrill. Employees of First Franklin were informed last week, he said. Halldin declined to say how many workers would be fired; as of December 2006, it had 2,800 employees.
Merrill shares have fallen by more than a fifth from an all-time high in January, partly on concern that Chief Executive Stanley O'Neal pushed into mortgage lending as the U.S. property market headed to its biggest decline in a decade. Lehman Brothers and Bear Stearns have scaled back subprime mortgage operations after borrower defaults hit a five-year high, making the business unprofitable.
Shares fell $1.80 to $72.85 in NYSE trading.
Staffing was reduced "to be in line with current business requirements," said Bill Halldin, a spokesman for Merrill. Employees of First Franklin were informed last week, he said. Halldin declined to say how many workers would be fired; as of December 2006, it had 2,800 employees.
Merrill shares have fallen by more than a fifth from an all-time high in January, partly on concern that Chief Executive Stanley O'Neal pushed into mortgage lending as the U.S. property market headed to its biggest decline in a decade. Lehman Brothers and Bear Stearns have scaled back subprime mortgage operations after borrower defaults hit a five-year high, making the business unprofitable.
Shares fell $1.80 to $72.85 in NYSE trading.
Labels: First Franklin Financial, layoffs, Merrill Lynch
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