4/19/2008

Merrill Lynch announces job cuts after $2 billion loss

Merrill Lynch, the investment bank, posted a loss Thursday and announced that it would lay off about 2,900 additional workers. Including about 1,000 jobs already eliminated this year, the company's work force is to shrink by 10 percent, or about 4,000 jobs, over the course of 2008.

The bank reported worst-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 divisions. The write-downs bring the total taken by Merrill Lynch in the last three quarters to more than $30 billion.

Merrill Lynch said it suffered a loss of $1.96 billion, or $2.19 a share, after its write-downs, in the first three months, down from a profit of $2.11 billion, or $2.26 a share, a year ago.

Analysts surveyed by Bloomberg News had expected a loss of $1.79 a share. 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 pre-tax loss of $4 billion for the first quarter and negative revenue of $690 million. The layoffs will save $800 million a year in compensation expenses, the bank said.

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