Thousands of jobs will be eliminated in support departments once Merrill Lynch is absorbed by Bank of America, says John Thain, Merrill's chief executive.
Most job cuts to be cut from Merrill will fall in corporate and services areas such as information technology, Thain said Monday in Dubai, according to the Financial Times. B of A is expected to complete its purchase of Merrill Lynch's investment and wealth management businesses by year-end.
"Thousands" of employees will lose their jobs, Thain reportedly said, without giving a precise figure. The looming cuts don't come as a surprise, since B of A has already stated that it expects to save $7 billion largely through staff reductions in overlapping departments when it completes the deal announced last month.
Thain himself won't be among the casualties. He is set to remain with B of A after the merger, heading up global banking, securities and wealth management.
Separately, Reuters reports that several top financial advisers from Merrill and other firms have defected to Morgan Stanley's global wealth management group during the last few weeks. While Merrill's 16,000 advisors await retention offers, the story cites concerns that a focus on the cost-cutting voiced by B of A Chief Executive Ken Lewis will impede prospects of brokers who stick with the merged firm.
The prospect of mass layoffs from Merrill follows reports that Barclays Capital plans to eliminate 3,000 U.S. jobs by year-end as a result of absorbing Lehman Brothers' North American operations. New York City Comptroller William Thompson recently predicted that New York will lose an additional banking-sector 35,000 jobs in the next two years.
In the Middle East, meanwhile, Merrill Lynch continues to expand. It formed a Saudi Arabia subsidiary late last year, and plans to open offices in Kuwait and Qatar by the end of the year.