UK - Merrill Lynch has succeeded in reducing its workforce by 9000 people globally after it offered voluntary redundancy last year to its 65,000 staff worldwide.
But the impact of the redundancies will be a $2.2bn pre-tax hit for this and other cost-cutting measures for the fourth quarter.
In a joint statement Merrill Lynch chairman and chief executive David Komansky and president and chief operating officer Stan O’Neal said:
“Based on a detailed review of all our businesses over the past three months, and our current market outlook, we are moving aggressively to make Merrill Lynch leaner, more competitive, more focused than ever on serving clients in our chosen markets around the world.
“This will position us to be more profitable, and to take maximum advantage of the long-term trends that continue to drive strong growth in financial services globally.”
The statement also noted the impact on its performance of its high-profile and damaging case with Unilever, as well as the terrorist attacks on the US in September.
It said: “The fourth quarter’s operating results demonstrated continued progress in containing expenses.
“Excluding September 11-related expenses and an increase in litigation costs due to certain settlements during the fourth quarter, non-compensation expenses are expected to be approximately 10% below the 2000 fourth quarter as the firm continued to realise the benefits of margin improvement actions, and as travel and other expenses related to business activity remained subdued.”
The measures are expected to bring an expense saving of $1.4bn each year. A substantial amount of this will flow through to earnings, while a portion will be reinvested in priority growth initiatives, the firm said.
By Paul Sanderson
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