Merrill Lynch froze new hiring, including replacement hires, for the remainder of 2008, according to media reports.
Retail brokers are exempt. Any other new hires must be approved by a member of Merrill's management committee, according to an internal memo from Greg Fleming, the bank's president Thomas Sanzone, the chief administrative officer.
"As we focus on returning the firm to profitability, it is extremely important that we all manage expenses prudently," the memo said, as quoted by Bloomberg News. It went on to say that the management committee is working on plans that will determine hiring for 2009. Bloomberg said a Merrill spokeswoman confirmed the memo's contents.
Merrill Lynch eliminated more than 4,200 jobs in the first six months of 2008. While those job cuts incurred severance and other restructuring costs totalling $445 million, Merrill expects to save about $730 million this year and $925 million annually in future years. Merrill's accrued compensation pool has dropped 20 percent so far this year to $7.7 billion, according to Bloomberg.
The bank's approach contrasts with that of Morgan Stanley, which said July 31 that it's plowing as much as 100 percent of the $1 billion it saved by cutting 4,800 jobs earlier this year, into selective new hiring.