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Pink slips expected at Merrill
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October 12, 1998: 5:09 p.m. ET
Sources predict 3,000 plus job cuts worldwide will be announced Tuesday
From CNNfn Correspondent Fred Katayama
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NEW YORK (CNNfn) - Merrill Lynch employees are bracing for bad news. Sources at Merrill and several industry insiders tell CNNfn that Merrill expects to announce job cuts Tuesday morning along with its third-quarter earnings.
One Merrill manager said the official word he'd heard is 3000 layoffs worldwide, but there's fear the number could be higher.
Signaling that the global financial crisis has spread to Wall Street's workers, the areas expected to be hardest hit are emerging-markets and fixed-income trading operations.
"The contagion has now hit the financial sector, which is a bigger deal because it can affect every sector of the economy. It's like having a problem with your circulatory system," says global strategist Bill Sterling of BEA Associates.
Citigroup (CCI) has already announced it will cut jobs and it is expected they will layoff as many as 8,000 workers, or roughly 5 percent of its workforce.
And ING Barings' parent, ING Groep (ING), is slashing 13 percent of its employee pool.
Brokerage firms have lost billions on global trading, while investment banking revenues have dried up. The number of companies going public shrank to just three in September. There were 58 such deals in June. Merger-and-acquisition deals have plunged as well.
"We've gone from boom to bust. I hope we're not going too much further than this. But we fully expect to see that as revenues slow up for there to be job cuts," says Hal Schroeder, senior banking analyst with Keefe Bruyette & Woods.
At Merrill (MER), the staff has been ordered to cut back travel and entertainment expenses. And a source says all managers have been asked to draft cost-cutting plans. As he put it, "It's no fun. People have lost their sense of humor here." 
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Merrill Lynch
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