London: Thousands of employees of battered financial services firm Merrill Lynch will lose their jobs after the firm is taken over by Bank of America (BoA), media report says.
The Financial Times quoted Merrill Lynch Chief Executive John Thain as saying that thousands of employees would lose their jobs when the company is taken over by Bank of America and the jobs would be lost in the corporate and services sectors, such as information technology.
Thain, speaking in Dubai while on a regional tour, added that BoA acquisition of Merrill’s investment and wealth management businesses would be completed by the end of the year, the report added.
According to estimates from New York City comptroller, William Thompson, New York is bracing itself for the loss of up to 35, 000 jobs in the banking sector.
The majority of the job losses are the result of the collapse this year of Bear Stearns and Lehman Brothers. Furthermore, when the Merrill Lynch-BoA deal was announced last month, the merger was expected to result in $7 billion of savings, including redundancies.
Given the economic slowdown, Thain further said he expected consolidation in the financial sector.
“There will be smaller institutions that need to be recapitalised or acquired,” the report quoted him as saying.
Thain also said that the Middle East would not escape the global slowdown, however, the regions large accumulated capital reserves could also be mobilised to invest outside the region.
Earlier this month, John Thain was named as president of global banking, securities and wealth management at BoA following completion of Merrill Lynch’s merger with the bank.