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Merrill offers severance
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October 22, 2001: 12:48 p.m. ET
The biggest U.S. brokerage will offer a package to all its employees.
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NEW YORK (CNNmoney) - Merrill Lynch & Co. Inc. will offer severance packages to all its employees, the company said Monday, in an effort to streamline its work force as its profits fall.
The nation's biggest brokerage started sending offers to its 65,900 employees Monday and will send them until early November. The package, which Merrill spokesperson Selena Morris described as "fair," could amount to more than a year's salary and include a significant percentage of each employee's 2000 bonus.
Though the company apparently does not have a specific number of job cuts targeted, the Wall Street Journal, citing senior people at the firm, last week reported that 10,000 jobs could be cut. Divisions that could be targeted include the New York-based Securities division as well as Nasdaq trading and Relationship Management, a source told CNNfn last week.
The Journal report also said the brokerage could take a charge of $1 billion related to the job cuts. It will be the second round of cuts for the brokerage this year; in March, it said it was cutting an unspecified number of jobs.
Brokerages, already suffering from a year-long downturn in the U.S. economy, were hit hard by the Sept. 11 terrorist attacks on the World Trade Center and Pentagon. Not only did many lose offices -- Merrill has been unable to return to its offices in the World Financial Center, across the street from the site of the World Trade Center -- but the stock market shut down for four days, and fell sharply when trading resumed.
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Merrill Lynch reported third-quarter earnings Thursday that were sharply lower than a year earlier. CEO David H. Komansky said the company was "not satisfied" with the results and would more aggressively try to improve its profit margin. That same day, Bear Stearns Cos. (BSC: up $1.44 to $53.92, Research, Estimates) said it planned to cut about 7.5 percent of its work force.
Merrill (MER: up $0.90 to $44.60, Research, Estimates) shares rose in midday trading. 
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