Lunchtime Links: BoA Merrill is planning as many as 400 investment banking job cuts
Bank of America Merrill Lynch has jumped on to the layoff bandwagon.
Just how many people are liable for redundancy remains unclear - Dow Jones says 3% of headcount within global banking and markets, Fox Business says 5%, Bloomberg pins it at 400 people while the New York Times suggests "several hundred" are facing the axe.
Clearly this is bad, but just how bad is open to debate. The timing of the (admittedly leaked) move is slightly strange, coming as it does after some high profile moves and fairly bullish statements of hiring intent within its investment bank.
As Dow Jones says, the bank has hired two times as many people this year than those likely to be laid off.
The cuts are global, and certainly constitute small proportion of overall headcount, so it could be an attempt to reduce the bonus pool after over-enthusiastic recruitment throughout this year. More worringly, it's likely that other investment banks will follow a similar tactic.
"You want to trim your least productive, weakest players to preserve the bonus pool for everyone else," one banker told the NY Times. "We know things haven't been great in the spring or summer."
The move follows a review by Thomas Montag, president of global banking and markets at BoA Merrill, and is likely to affect all levels of seniority within the division. Cuts are expected to hit under-performing trading desks in particular.
If true, this seems like an attempt to clear the dead wood, rather than a tooth and claw reduction in headcount.
However, Dick Bove, an analyst with Rochdale Securities, remains unconvinced.
"The headcount cuts are only one part of it," he told the NY Times. "Both on the capital markets side and on the traditional banking side, BoA is under pressure."
BoA Merrill is expected to formally announce the move this week.
Cable: politicians will go on the war path against big banking bonuses (Telegraph)
Clegg: Don't pay "gratuitously offensive" bonuses (Guardian)
Czech Broker poaches from Unicredit in first stage of City expansion (Financial News)
UBS looks to move investment bank closer to wealth management unit (Wall Street Journal)
Lloyd Blankfein has earned $125m over the last decade (Bloomberg)
Brevan Howard to kick-start Brazil operation (Financial Times
BarCap poaches from Deutsche a new SE Asia head ( Reuters)
Is there any point teaching MBAs ethics? (Financial Times)
Deloitte has shifted legal home FROM Switzerland TO the UK...(Guardian
Possible replacements for Eric Daniels (Telegraph)
America's 'recovery' job loss figures (Clusterstock)
