Merrill Lynch layoffs timeline

Merrill Lynch seems to have started its layoffs plan as part of the BoA merger this week. There is no official statement yet on how many jobs are on the chopping block but there have been isolated reports about immediate cuts taking place.

In order to get a sense of these cuts, you need to look at how Merrill has grown its workforce over recent years and what cuts have already taken place. At EOY 2003, Merrill had a total of 48,100 full-time employees worldwide (38,200 in US). The number of worldwide employees grew 5.2% in 2004, 7.9% in 2005, 2.9% in 2006 and a remarkable 14.2% in 2007. Merrill had 64,200 employees worldwide at the end of 2007, 48,700 of them being in the US.

A couple of days after Christmas 2007, Merrill announced that it's going to cut 1100 jobs and let go 500 consultants as part of its disappointing 4th quarter erarnings release.

Then, on April 18th of this year, Merrill announced another 2900 job cuts bringing the total for the year to 4000. Thain had a conference call with the company's financial advisors to allay their concerns and when asked about further job cuts, said:

“I think 4,000 is enough for the environment we’re in today.”

Well, he was right except that the environment did change for the worse quickly.

Yesterday's news was that Merrill is cutting 500 trading jobs starting this week.

Ming Pao Daily News is reporting today that Merrill has cut 10% of its Hong Kong workforce as well as 10% of Asian trading division. For those of us who cannot read Mandarin, here is the Morning Star link

Merrill Hong Kong has 700 employees, so the number of jobs cut would be 70. They have a total of 5500 employees in Asia but it's not clear what the size of their Asian trading division is. It's also not clear if these cuts are part of the 500 trading job cut announced yesterday.

After all the above announced cuts, Merrill's workforce should be around 59,500. That is still 3,700 more than what they had at EOY 2006 and 4,900 more than EOY 2005. What makes Merrill's layoffs worse is that in 2007, when it was becoming clear that tough times might be ahead they added 14.2% employees to their payroll. Now as much would need to be laid off just to account for the slowdown and then there would be additional cuts as part of the restructuring due to the merger.