Merrill Lynch to cut 3,000 jobs

[marmar]

from Bloomberg:





Merrill Posts Loss on Mortgage Writedowns, Cuts Jobs (Update6)

By Bradley Keoun

April 17 (Bloomberg) -- Merrill Lynch & Co. posted its third straight quarterly loss and said it will cut about 3,000 more jobs after the credit seizure forced the investment bank to write down at least $6.5 billion of debt.

The first-quarter net loss of $1.96 billion, or $2.19 a share, compared with earnings of $2.16 billion, or $2.26, a year earlier, the third-biggest U.S. securities firm by market value said today in a statement. Analysts had predicted a loss of $1.72 billion, based on estimates compiled by Bloomberg. Merrill rose in New York trading.

Chief Executive Officer John Thain said today he expects ``more difficult'' months ahead. Since taking the job in December, he has sold more than $12 billion of equity to bolster capital and overhauled risk-management after the company booked more than $20 billion of credit-market losses. Merrill's stock has fallen 50 percent in the past 12 months, trailing larger New York-based rivals Goldman Sachs Group Inc. and Morgan Stanley.

``The current environment is still tough,'' said Rose Grant, managing director in the investment-advisory division of Boston-based Eastern Bank Corp., which owns about 66,000 Merrill shares. ``People are still reluctant to buy certain types of assets, and I don't think we'll see the end of that until later this year.''

Merrill gained 87 cents, or 2 percent, to $45.76 at 10:19 a.m. in New York Stock Exchange composite trading, after falling as low as $43.23 earlier today.

`Deteriorating Conditions'

The first-quarter writedowns included $2.6 billion to account for the plummeting value of mortgage-related bonds including collateralized debt obligations. Merrill also reduced the value of bond insurance contracts by $3 billion, and lowered the value of leveraged loans by $925 million.

The markdowns reflected in Merrill's net loss exclude a $3.1 billion drop in the value of securities held in the firm's U.S. banks. Those declines were classified as ``other comprehensive income,'' an accounting category for securities that Merrill expects to keep until they pay off at maturity. .........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aIcCx0ipgovI&refer=home

[Javaman]

1. Weeeeeeeeee time to cash out my 401K. nt