Merrill Likely To Cut Managing Directors

Merrill has stated that the bulk of its staff reductions are 'behind us' as 15,000 people have lost their jobs at the firm in the last 12 months or so. Having said this, the firm is thought to be close to be announcing further cuts in underperforming areas.

In these difficult times for investment banks many feel it makes sense to consider exiting senior staff rather than focus on saving substantially less by axing junior collegues who can be retrained to work in other areas.

It is thought that Merrill is also close to making a decision about the fate of 25% of its European investment banking staff. The firm employs around 450 in this group and many believe that there is insufficient business volume to justify keeping them all on the payroll.

Merrill Lynch has been criticised in the past for cutting headcount too soon and too deeply. This time it is further down the track with its redundancy programmes than most rivals. And this time it may well have got it right. Largescale cuts are soon expected at competitor banks.