Merrill Lynch today said it planned to cut 4,000 jobs after posting a quarterly loss of $2bn (£1bn).
The job cuts cover about 10 per cent of Merrill Lynch staff, excluding financial advisers and investment associates. The company, which ended March with 63,100 employees overall, said it would target the job cuts to its markets and investment banking operations and in support areas.
The bank recorded more than $9.5bn in write-downs and losses on subprime mortgages and other risky assets.
The results were worse than analysts' gloomy expectations, and shares of the world's largest brokerage fell more than 2 per cent in pre-market trading.
Chief Executive John Thain is trying to turn the company around as it struggles with the aftermath of bad bets on subprime mortgages and repackaged debt. He is increasing the investment bank's business in emerging markets and cutting costs to help offset write-downs.
Merrill Lynch reported losses, write-downs and reserve increases of $1.5bn on collateralised debt obligations, $925m on loans financing leveraged buyouts, $3.5bn on an investment portfolio, more than $800m on residential mortgages, and $3bn for exposure to bond insurers.
Merrill Lynch's first-quarter net loss was $1.96bn, compared with a year-earlier profit of $2.16bn.
Including preferred stock dividends, the loss was $2.14bn, or $2.19 per share, and compared with a profit of $2.11bn, or $2.26 a share, a year earlier.
Thain said that despite the loss, Merrill Lynch remained "well-capitalized."Reuse content