Financial Giants Gear Up To Cut Thousands of Jobs

After geting burned by billions of dollars in losses from the mortgage meltdown, financial giants like Merrill Lynch and Citigroup are gearing up for major job cuts in the new year; could start announcing layoffs as soon as Thursday, CNBC has learned. The jobs cuts, which may be made over several weeks, could total up to 10% of those employees who are not in investment banking or brokerage operations, or about 1,600 positions. The credit and bond departments are most at risk.

Merrill Lynch had about 64,000 employees at the end of September, so a reduction of 1,600 employees would represent less than 3 percent of its total work force.

Merrill had no comment, and the final cuts will be up to the firm's new CEO, John Thain.

Thain is still trying to raise more capital for the firm, which reported writedowns of $8.4 billion in the third quarter because of bad bets on mortgage-backed securities. Analysts expect a further $10 billion in charges when it posts fourth-quarter results in January.

Thain is in discussions to bolster the company's capital base through further investments by sovereign wealth funds. This would add t week's deal to sell up to $6.2 billion in shares to Singapore’s Temasek and asset manager Davis Selected Advisers.

Meanwhile, Citigroup is expected to begin layoffs next week, according to people familiar with the matter.

is expected to cut between 5 percent and 10 percent of its staff of about 320,000, these people within the firm say.

Neither Citigroup's Chief Executive Vikram Pandit nor the firm's public relations staff have issued a formal announcement on the matter.

Citigroup has reported about $6.5 billion in third-quarter writedowns from mortgage-related losses and could face a total of $22 billion in writedowns.


one of the 10 largest U.S. banks, said Wednesday it will eliminate 900 jobs as it stops offering mortgages through brokers.

The company also said it plans to raise more capital to help it cope with deteriorating credit markets, and hired Goldman Sachs Chief Executive Peter Raskind said in a statement that National City needed to take "aggressive steps" to cope with disruptions in the mortgage, housing and credit markets. Cleveland-based National City operates about 1,445 branches, mainly in U.S. Midwest states.

It has significant operations in Florida, Ohio and Michigan, which ranked second, third and fifth nationwide in foreclosures in November, according to RealtyTrac.

© 2008 CNBC.

http://www.cnbc.com/id/22476128

...or the Board's dividends did you? This is what they do. They come up with these scams. When it blows up in their faces, other people (employees & shareholders) pay the price. At best it's a wash for them, and sometimes they get gains for failing like this.

It's all rigged. This news doesn't suprise me in the least.

to go on. These CEO's that make the circuit from one company to another and these type of disasters as a result of their greed and incompetence just keeps going on and on in the "good ol boys club taking care of each other to the detriment of the employees.

This is the sort of thing Edwards is talking about.

> how long will this sort of thing be allowed to go on?

How long will unbridle capitalism be going on? The
answer exactly the same.

Tesha