Merrill Lynch & Co (MER.N) on Thursday posted a quarterly loss of $2 billion and said it planned to cut 4,000 jobs after recording more than $9.5 billion in write-downs and losses on subprime mortgages and other risky assets. The results were worse than analysts' gloomy expectations, and shares of the world's largest brokerage fell more than 2 percent in premarket trading.
Chief Executive John Thain is trying to turn the company around as it struggles with the aftermath of bad bets on subprime mortgages and repackaged debt. He is increasing the investment bank's business in emerging markets and cutting costs to help offset write-downs.
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.
The job cuts cover about 10 percent of Merrill Lynch staff, excluding financial advisers and investment associates. The company, which ended March with 63,100 employees overall, said it would target the job cuts to its markets and investment banking operations and in support areas.
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