Standard & Poor’s reported that Merrill Lynch & Co. Inc. (rated AA-/Negative/A-1+) and Bear Stearns Cos. Inc. (rated A/Negative/A-1)have separately announced major restructurings in which both firms are accelerating the pace of cost saving initiatives and layoffs that had begun earlier this year. These actions indicate that the senior management of these companies are pessimistic about the near-term outlook for the domestic securities industry. In particular, the weakness in U.S. equity origination and merger and acquisitions activities shows no signs of a pickup any time soon. As a result, it can be expected that the investment banking divisions at these two companies, and at other Wall Street firms as well, are primary targets for headcount reductions. The dismal revenue outlook and the need for more expense cuts reinforce the negative ratings outlooks on Bear Stearns and Merrill Lynch. In the case of Bear Stearns, the company is eliminating about 7.5% of its workforce, both front-line and back-office personnel. Merrill Lynch’s newly formed new senior management team is currently reviewing all of its businesses, a process which will continue through the end of the year. The extent of any expense cuts has not yet been determined, but Merrill Lynch’s money-losing Japanese private client business and its joint venture with HSBC are particularly vulnerable.
UK firms investment in training and development will increase, on average, by a fifth in the next year, claims Robert Half recruitment after interviewing 100 financial services (FS) executives.
A report by broking group Marsh examines the repercussions from the administration of the South Korean company, which filed for bankruptcy protection at the end of August.
Global research by C2FO suggests that smaller businesses are less concerned with the repercussions of Brexit and the upcoming US presidential election.
A squeeze on skilled talent means it now takes an average of seven weeks to fill open permanent roles in finance in the UK according to new research from financial services recruitment firm Robert Half.