Merrill Lynch to shed 4,000 jobs globally

The world’s largest stockbroker, Merrill Lynch, has announced it is to axe 4,000 jobs worldwide with up to 400 of its 4,500 London staff facing redundancy.

The job cuts are as a result of poor risk management for Merrill’s over-exposure to bad sub-prime mortgage debt.

Merrill also announced heavy losses from the first quarter of this year. The bank said it lost $1.96 billion (£1 billion) compared with a profit of $2.1 billion a year ago - broadly in line with analysts expectations. Merrill has already written off $24 billion since the sub-prime mortgage crisis erupted last year.

John Thain, Merrill’s chief executive, said that the firm remained well-capitalised and that there were no plans to raise more capital.

The news follows that from Swiss bank UBS who announced it is to axe 900 staff at its City headquarters on Liverpool Street by June. The banking giant is the biggest casualty of the credit squeeze with losses of $37.4 billion (£19 billion).

The 900 staff amounts to 10% of UBS’ 9,000-strong London workforce.

In addition, employees of Citigroup, the world’s biggest bank, are now preparing for job losses. Insiders say the bank is likely to lay off 1,000 London staff when its first quarter results are published today.

Commentator David Buik of BGC Partners said the job cuts were inevitable and more banks will follow suit.

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