HIRING FREEZE AT BATTERED MERRILL
Bloomberg
Posted: 4:02 am
August 15, 2008
Merrill Lynch & Co., the US securities firm struggling to halt a four-quarter streak of $19 billion in net losses, imposed a freeze on new hires through the end of this year.
The freeze extends to previously budgeted posts as well as replacement hires, according to an internal memo distributed Wednesday and confirmed yesterday by spokeswoman Jessica Oppenheim.
The freeze doesn't apply to retail brokers, who comprised about 16,690 of the firm's 60,000 workers in June, the memo said.
Exceptions to the new policy "can only be made by a member of the management committee," said the memo, which was signed by President and Chief Operating Officer Greg Fleming and Chief Administrative Officer Thomas Sanzone.
"As we focus on returning the firm to profitability, it is extremely important that we all manage expenses prudently."
Chief Executive Officer John Thain is paring expenses after losses on subprime mortgages and related securities eroded revenue.
Merrill slashed its compensation pool, accrued throughout the year to cover year-end bonuses, by 20 percent this year to $7.7 billion.
The world's biggest banks and securities firms have cut about 100,000 jobs since the start of the credit crisis last year.
At Merrill, reducing headcount by attrition may be cheaper than mass layoffs.
The firm eliminated more than 4,200 jobs in the first half, resulting in more than $445 million in severance and other restructuring costs.
Merrill says the cuts will save about $730 million this year and $925 million each year thereafter.
Thain is responsible for some of the firm's biggest hires.
Tom Montag, a former Goldman Sachs colleague who joined last week as Merrill's new trading chief, was guaranteed a $39 million bonus for this year, to be paid in January.
According to the memo, the majority of hiring occurs during the first half of the year.
Posted: 4:02 am
August 15, 2008
Merrill Lynch & Co., the US securities firm struggling to halt a four-quarter streak of $19 billion in net losses, imposed a freeze on new hires through the end of this year.
The freeze extends to previously budgeted posts as well as replacement hires, according to an internal memo distributed Wednesday and confirmed yesterday by spokeswoman Jessica Oppenheim.
The freeze doesn't apply to retail brokers, who comprised about 16,690 of the firm's 60,000 workers in June, the memo said.
Exceptions to the new policy "can only be made by a member of the management committee," said the memo, which was signed by President and Chief Operating Officer Greg Fleming and Chief Administrative Officer Thomas Sanzone.
"As we focus on returning the firm to profitability, it is extremely important that we all manage expenses prudently."
Chief Executive Officer John Thain is paring expenses after losses on subprime mortgages and related securities eroded revenue.
Merrill slashed its compensation pool, accrued throughout the year to cover year-end bonuses, by 20 percent this year to $7.7 billion.
The world's biggest banks and securities firms have cut about 100,000 jobs since the start of the credit crisis last year.
At Merrill, reducing headcount by attrition may be cheaper than mass layoffs.
The firm eliminated more than 4,200 jobs in the first half, resulting in more than $445 million in severance and other restructuring costs.
Merrill says the cuts will save about $730 million this year and $925 million each year thereafter.
Thain is responsible for some of the firm's biggest hires.
Tom Montag, a former Goldman Sachs colleague who joined last week as Merrill's new trading chief, was guaranteed a $39 million bonus for this year, to be paid in January.
According to the memo, the majority of hiring occurs during the first half of the year.
Labels: hiring, Merrill Lynch
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