Merrill Lynch Posts Third Straight Quarterly Loss, To Cut 2,900 More Jobs

April 18, 2008 (FinancialWire) Merrill Lynch & Co. (NYSE: MER) has posted its third straight quarterly loss and said it planned to cut 2,900 more jobs after recording more than $6.5 billion in write-downs on subprime mortgages and other risky assets.

Chief executive John Thain said the bank is well capitalized, but added that Merrill Lynch may look to issue preferred shares similar to JPMorgan Chase & Co.'s (NYSE: JPM) $6 billion sale.

Merrill Lynch's first-quarter net loss to common shareholders was $2.14 billion, compared with a profit of $2.11 billion, in the same quarter last year.

As part of that cost cutting, Merrill said it was cutting head count by 4,000 from year-end 2007 levels; about 1,100 of the reductions took place in the first quarter. Job cuts will focus on the global markets and investment banking business and support areas, and will not affect retail brokers.

At the end of the first quarter, the company had 63,100 employees. Merrill Lynch expects a second-quarter restructuring charge of about $350 million linked to the job cuts. The reduced headcount is expected to generate about $800 million of cost savings a year.

Merrill Lynch reported losses, write-downs and reserve increases of $1.5 billion on collateralized debt obligations, $925 million on loans financing leveraged buyouts, $3.5 billion on an investment portfolio, more than $800 million on residential mortgages, and $3 billion for exposure to bond insurers.

Merrill Lynch shares closed up 4.1 percent at $46.71 on Thursday.

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