Worldwide slump hits bankers' Christmas party

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The Independent Online
THE GLOBAL financial crisis has finally hit where it hurts. Merrill Lynch, the American investment bank, yesterday cancelled its Christmas party in London in the first of a series of moves to cut pounds 150m a year from its costs.

Its 600 staff were looking forward to a repeat of last year's yule-tide festivities at the Natural History Museum in South Kensington, London, but were told by management yesterday that the party had been axed as part of an austerity drive.

Renting the museum's dinosaur hall costs about pounds 7,000 at Christmas. Merrill will now lose its deposit on the booking, worth around half that. The evening's costs would have come to more than pounds 20,000. Merrill said: "It's fair to say that we're reconsidering some of our entertaining plans, including the Natural History Museum. In the present environment it might give way to a wine bar - or the Old Bull and Bush pub might be more appropriate."

It is not alone in planning to cut costs. With billions lost in Asia and Russia, most City institutions are tightening their belts. Merrill's staff learnt of other restrictions yesterday.

No more limousines to Heathrow. Staff are now banned from hiring a car for lifts to the airport. No more Concorde to New York. Staff will have to travel economy class. City sources suggest that BA will be hard hit, as Merrill Lynch executives have been one of Concorde's mainstays in recent years. No more slap-up meals with contacts at fancy restaurants without permission. Entertaining clients must be agreed with superiors first.

However, the biggest worry in the City is that the cost-cutting will extend to bonuses, which depend entirely on profits earned by the banks.

City jobs gloom, page17

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