Merrill Lynch & Company will eliminate 2,900 jobs as it struggles to recover from its third consecutive quarterly loss which it announced on Thursday.
The company said it was taking $6.6 billion in write-downs related to mortgages, collateralized debt obligations and generally badly underwritten commercial loans, resulting in a first quarter loss of $1.96 billion or $2.19 per share. Another $3.1 billion was written down because of mortgage-related securities but was accounted for elsewhere.
With the current figures, Merrill has now reported net losses over the last three quarters to $14 billion. This equals what the bank earned in 2005 and 2006.
The 2,900 jobs that will be eliminated will came mainly from the capital markets and trading side of the company and Merrill Lynch expects that it will realize about $800 million from the cuts. Some sources said that 4,000 jobs were scheduled for cuts, others said this included 1,100 that had been announced earlier, to come from the mortgage banking side. In a conference call with analysts, company CEO Merrill CEO John Thain, said that the first quarter was "as difficult a quarter as I've seen in my 30 years on Wall Street" but said that, while things would not be dramatically improving right away that business has improved in April and that it is probable that Merrill will be profitable for the rest of the year.