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Tuesday, February 9, 2010
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Painful layoffs seen in Merrill-BofA merger
Expect painful layoffs after the completion of the merger of Bank of America Corp. of Charlotte, N.C., and Merrill Lynch & Co. Inc. of New York, according to one analyst.
As much as 10% of the combined work force — or 27,000 employees — could be shown the door, Alois Pirker, an analyst with the Aite Group of Boston wrote in a research note today. “Many employees at both firms will ask themselves and their superiors whether their jobs are safe,” he wrote. “While it is too early to tell for the most part, one thing is certain: In order to achieve the announced $7 billion in pre-tax savings by 2012, a good number of people will lose their jobs.” Bank of America said on Monday it was buying Merrill Lynch for $50 billion in stock. The transaction is expected to close in the first quarter of next year. A spokeswoman for Bank of America, Shirley Norton, said she had no comment about Mr. Pirker’s forecast. “It’s way too early,” she said.
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