Merrill Lynch joins competitors considering further job cuts

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Merrill Lynch has added its name to the list of investment banks considering job cuts as desperate market conditions lead to further redundancies across the globe.

The US bank said the haste with which it is reviewing its businesses is &quotaccelerating&quot as market conditions continue to worsen. It said in a statement: &quotThroughout this year, in a deteriorating revenue environment, we've been engaged in a review of all of our businesses to make sure they are sized properly for the market opportunity. While the pace of this review is accelerating, decisions will be made business-by-business and we have no overall company-wide headcount-reduction target.&quot

Merrill joins Commerzbank and Credit Suisse First Boston (CSFB) in reconsidering the number of staff it needs. CSFB and Commerzbank have both detailed extensive job cuts in the past week, as investment banks struggle to generate the same levels of business as last year.

European equity issuance, a large source of revenues in 2000, is down 57% in the first nine months of this year and mergers and acquisitions activity is down 52%, according to Dealogic, the investment banking research firm.

This downturn in activity has prompted CSFB to cut 2,000 jobs, or about 7% of its global workforce. John Mack, chief executive of CSFB, said: &quotTo compete effectively with other top-tier financial services firms, we need to drive down costs and seek ways to operate more efficiently.&quot

Commerzbank also aims to cut 3,400 people by 2003. Of these, 190 will be in investment banking, although Klaus-Peter Müller, chairman of the board of managing directors at Commerzbank, said: &quotGiven a sustained improvement in market conditions, up to 60 of these jobs will be restored in 2002.&quot

Rolf Breuer, the chief executive of Deutsche Bank, said last week the group may have to lay off more than the 2,600 employees originally announced. A number of other investment banks have also had to cut staff globally this year, including ING Barings, ABN Amro and Société Générale.

Müller said: &quotThe goal is to get our cost/income ratio and return on equity back on the right course again, even if - and we cannot rule this out - economic stagnation and the lethargic condition of the stock markets persist for some time to come.&quot

Merrill will announce its third quarter results tomorrow.

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