Merrill takes axe to 9,000 jobs

BROKER Merrill Lynch unveiled massive job losses as it took the axe to a further 9,000 people. The losses will reduce the Thundering Herd to 57,000 employees from 72,000 this time last year as the market downturn forces new president Stanley O'Neal to accelerate cost-cutting plans.

The firm, which has also imposed a pay freeze, said the latest restructuring round would cost it $2.2bn (£1.5bn) in its fourth quarter but would generate savings of $1.4bna year.

Annual results due on 21 January are expected to show fourth-quarter sales were down 8% in the previous three-month period, hit by reduced trading volumes and the 11 September terrorist attacks on the US. Diluted core earnings per share are expected to be between 48 and 50 cents.

The group also today signalled a retreat from Japan with the closure of 20 of its 28 retail branches in the country and the loss of 1,200 of its 1,700 sales staff there.

Merrill was one of the first foreign brokers to tackle the tricky Japanese stockbroking market and had ambitions to beat local giants such as Nomura at their own game by setting up a chain of retail shops. It gambled on winning big market share by taking over the failed Yamaichi Securities group in 1998, but tumbling turnover as Tokyo's stock market slumped savaged its aim to be in profit by the end of March this year.

Although it had built up a base of more than 100,000 clients, the merged brokerage failed to generate enough commission to stay out of the red and losses in the year to last March were 24.8bn yen (£134m).

THE yen today plunged to a three-year low against the dollar in a sign that the Japanese government is hoping to export its way out of recession. The dollar posted its biggest one-day gain against the Japanese currency since last September, rising to 133.37 yen.