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Wall Street mulls layoffs
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September 22, 1998: 2:11 a.m. ET
Merrill Lynch, Salomon Smith Barney reported considering hundreds of cuts
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NEW YORK (CNNfn) - Some of the nation's leading brokerages, battered by declines in stock markets, are considering job cuts to shore up their financial results, according to a published report on Tuesday.
Merrill Lynch, the largest brokerage in the country, is expected to announce the elimination of at least 500 jobs, mainly in the trading and investment banking areas, the Wall Street Journal reported on Tuesday, citing people familiar with those operations.
Likewise, Salomon Smith Barney, the brokerage unit of Travelers Corp., is considering cuts of hundreds of jobs, especially in departments that have been hit hardest by the selloff in global stock and bond markets, the newspaper said.
The report comes as the brokers' own financial performance has suffered along with the markets'. Merrill Lynch (MER), for instance, closed Monday's trading at 54, after peaking above 109 in July.
Investors' concerns are not misplaced. The industry is expected to post its weakest earnings since the fourth quarter of 1994, when Wall Street firms reported a collective loss of $136 million. Since mid-1995, by contrast, the industry has consistently reported after-tax quarterly profits in excess of $1 billion, the Journal reported.
A Merrill Lynch spokesman told the newspaper that no final decisions had been made about layoffs. A Salomon spokesman declined to confirm the report.
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