One thing I’m very happy about here in NY, where the job market is very depressed and getting worse, is that I for whatever crazy reason, decided last year to leave my corporate position and take this lower-paying position in the non-profit sector. The fact is that I did it because I wanted to do something that mattered, and because it wasn't for too much less, and in the interim, I’ve already received a nice raise, and I have the kind of job security here that is going to be in short supply out there. For some time to come. I really feel for these people losing their jobs here. I don’t know what it’s like in other parts of the country right now, but here, the job market has dried up.
Bank executives warned on Thursday that Merrill could continue to struggle as the broader economic downturn continues.
In the interview, Mr. Thain sounded a more negative note on the economy than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.
“So far the slowdown has been finance-driven,” Mr. Thain said. “What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
The recession, he said, is going to move from being a finance-driven problem to a consumer-driven one, and Merrill may continue to struggle as a result.
Merrill Posts a Loss and Plans to Cut 2,900 More Jobs
By LOUISE STORY
Merrill Lynch & Company, the investment bank, posted a loss on Thursday and announced that it would cut about 4,000 jobs by the end of the year.
The 4,000 layoffs include 1,100 jobs — mostly in mortgage-related businesses — that have already been cut this year.
The bank reported worse-than-expected earnings for the first quarter, including $6.5 billion in write-downs and adjustments to assets in its mortgage, leveraged finance and other assets. The write-downs bring Merrill’s total in the last three quarters to more than $30 billion.
Merrill said in its earnings release that it had lost $1.96 billion or $2.19 a share, after its write-downs, in the first three months, down from a profit of $2.106 billion or $2.26 a share in the same period a year ago.
Analysts surveyed by Bloomberg News had expected a loss of $1.79 a share.
Merrill’s revenue, including interest and dividends, was $2.9 billion — down 69 percent from a year ago.
The job cuts will come from the company’s global markets and investment banking division, which includes fixed income, currency, commodity and equity trading as well as banking. That part of the bank recorded a pretax loss of $4 billion this quarter and negative revenue of $690 million. The layoffs will save $800 million a year in compensation expenses, the bank said. The jobs cuts represent 10 percent of the bank’s work force excluding financial advisers and investment associates.
When asked about additional layoffs, John A. Thain, chairman and chief executive of Merrill Lynch, said in an interview, “I think 4,000 is enough for the environment we’re in today.”
He said that Merrill was reacting to the downturn not only with job cuts but also by deleveraging its assets.
Bank executives warned on Thursday that Merrill could continue to struggle as the broader economic downturn continues.
In the interview, Mr. Thain sounded a more negative note on the economy than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.
“So far the slowdown has been finance-driven,” Mr. Thain said. “What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
The recession, he said, is going to move from being a finance-driven problem to a consumer-driven one, and Merrill may continue to struggle as a result.
But Mr. Thain said the bank was on solid footing; it has raised more than $12 billion in fresh capital, including some from sovereign wealth funds that manage funds for foreign governments.
The market, however, initially reacted negatively. Merrill’s shares fell $2 or 4.6 percent, in pre-market trading but were up more than 2 percent in afternoon trading.
Meanwhile, Moody’s Investors Service placed the bank’s long-term debt on review for a possible downgrade. The ratings agency predicted that Merrill Lynch would be forced to lower the value of its mortgage assets known as collateralized debt obligations by an additional $6 billion. Merrill marked down the values of bonds and other assets it owned by $27.4 billion last year, mostly related to the meltdown in the subprime mortgage market.
http://www.nytimes.com/2008/04/17/business/17cnd-merrill.html?_r=1&hp=&oref=slogin&pagewanted=print
Bank executives warned on Thursday that Merrill could continue to struggle as the broader economic downturn continues.
In the interview, Mr. Thain sounded a more negative note on the economy than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.
“So far the slowdown has been finance-driven,” Mr. Thain said. “What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
The recession, he said, is going to move from being a finance-driven problem to a consumer-driven one, and Merrill may continue to struggle as a result.
Merrill Posts a Loss and Plans to Cut 2,900 More Jobs
By LOUISE STORY
Merrill Lynch & Company, the investment bank, posted a loss on Thursday and announced that it would cut about 4,000 jobs by the end of the year.
The 4,000 layoffs include 1,100 jobs — mostly in mortgage-related businesses — that have already been cut this year.
The bank reported worse-than-expected earnings for the first quarter, including $6.5 billion in write-downs and adjustments to assets in its mortgage, leveraged finance and other assets. The write-downs bring Merrill’s total in the last three quarters to more than $30 billion.
Merrill said in its earnings release that it had lost $1.96 billion or $2.19 a share, after its write-downs, in the first three months, down from a profit of $2.106 billion or $2.26 a share in the same period a year ago.
Analysts surveyed by Bloomberg News had expected a loss of $1.79 a share.
Merrill’s revenue, including interest and dividends, was $2.9 billion — down 69 percent from a year ago.
The job cuts will come from the company’s global markets and investment banking division, which includes fixed income, currency, commodity and equity trading as well as banking. That part of the bank recorded a pretax loss of $4 billion this quarter and negative revenue of $690 million. The layoffs will save $800 million a year in compensation expenses, the bank said. The jobs cuts represent 10 percent of the bank’s work force excluding financial advisers and investment associates.
When asked about additional layoffs, John A. Thain, chairman and chief executive of Merrill Lynch, said in an interview, “I think 4,000 is enough for the environment we’re in today.”
He said that Merrill was reacting to the downturn not only with job cuts but also by deleveraging its assets.
Bank executives warned on Thursday that Merrill could continue to struggle as the broader economic downturn continues.
In the interview, Mr. Thain sounded a more negative note on the economy than some of his Wall Street colleagues, saying he did not think the downturn was near its bottom.
“So far the slowdown has been finance-driven,” Mr. Thain said. “What we haven’t seen yet is the impact on the consumer of falling house prices, rising energy prices, higher food prices and higher unemployment.”
The recession, he said, is going to move from being a finance-driven problem to a consumer-driven one, and Merrill may continue to struggle as a result.
But Mr. Thain said the bank was on solid footing; it has raised more than $12 billion in fresh capital, including some from sovereign wealth funds that manage funds for foreign governments.
The market, however, initially reacted negatively. Merrill’s shares fell $2 or 4.6 percent, in pre-market trading but were up more than 2 percent in afternoon trading.
Meanwhile, Moody’s Investors Service placed the bank’s long-term debt on review for a possible downgrade. The ratings agency predicted that Merrill Lynch would be forced to lower the value of its mortgage assets known as collateralized debt obligations by an additional $6 billion. Merrill marked down the values of bonds and other assets it owned by $27.4 billion last year, mostly related to the meltdown in the subprime mortgage market.
http://www.nytimes.com/2008/04/17/business/17cnd-merrill.html?_r=1&hp=&oref=slogin&pagewanted=print
