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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Gersh Avery who wrote (31489)	10/14/1998 12:18:00 AM
From: flickerful	Respond to of 94695

Merrill Lynch to cut 3,400 jobs ft/ 14 oct 98 By Tracy Corrigan in New York and Clay Harris in London Merrill Lynch, one of the world's biggest investment banks, is cutting 3,400 jobs worldwide after a sharp decline in third-quarter earnings because of global market turmoil. The slashing of around 5 per cent of Merrill's total workforce of 65,000, announced yesterday, is likely to foreshadow large-scale job cuts by other Wall Street firms that have a broad spread of international business and are active in fixed-income markets. Analysts said J.P. Morgan and Credit Suisse First Boston were expected to be among the hardest hit by the upheavals in financial markets, which have caused sharp losses in trading and hit revenues from underwriting. Salomon Smith Barney is expected to face heavy cuts as its business is joined with Citibank's as part of the multi-billion-dollar merger of Travelers Group and Citicorp to form Citigroup. Last week, the group issued a profits warning on the first day of its existence as a merged entity. "We don't see a glimmer of hope," said one Wall Street headhunter. "It's really cutting into our business. Many people will be displaced for good." Merrill expects to lose up to 450 of its 8,000 staff in Europe, the Middle East and Africa, its largest region outside the US and one where it has doubled its employment in three years. The great majority of these will come from the 6,000 workforce in the UK. Michael Marks, the region's executive chairman, said: "We don't take redundancies lightly, but we need to get down to our fighting weight." Merrill, the world's leading debt underwriter, is one of the biggest employers in the industry and has made a series of high-profile acquisitions in recent years, including Mercury Asset Management in the UK. Merrill was also one of the driving forces behind last month's rescue of Long-Term Capital Management, the troubled US hedge fund in which the Wall Street bank's top executives had invested. David Komansky, Merrill chairman and chief executive, described the jobs reduction as "a painful thing for us to do. I am extremely hopeful that we won't have to do more as we go forward". However, he said that the company needed to "rescale and resize businesses that we think are in difficulty and reduce our cost base". Mr Komansky also admitted that "compensation levels in the industry have been driven quite high". In addition to the 3,400 job cuts involving its own staff, the firm will also cut 900 external consultants, mainly involved in technology projects. Headhunters said bonuses paid to investment bankers at the end of the year would have to be reduced sharply.