Enter multiple symbols separated by commas

Financial Giants Gear Up To Cut Thousands of Jobs

After geting burned by billions of dollars in losses from the mortgage meltdown, financial giants like Merrill Lynch and Citigroup are gearing up for major job cuts in the new year.

Merrill Lynchcould start announcing layoffs as soon as Thursday, CNBC has learned.

The jobs cuts, which may be made over several weeks, could total up to 10% of those employees who are not in investment banking or brokerage operations, or about 1,600 positions.

The credit and bond departments are most at risk.

Merrill Lynch had about 64,000 employees at the end of September, so a reduction of 1,600 employees would represent less than 3 percent of its total work force.

Merrill had no comment, and the final cuts will be up to the firm's new CEO, John Thain.

Thain is still trying to raise more capital for the firm, which reported writedowns of $8.4 billion in the third quarter because of bad bets on mortgage-backed securities. Analysts expect a further $10 billion in charges when it posts fourth-quarter results in January.

Merrill Lynch
Merrill Lynch

Thain is in discussions to bolster the company's capital base through further investments by sovereign wealth funds. This would add to last week's deal to sell up to $6.2 billion in shares to Singapore’s Temasek and asset manager Davis Selected Advisers.

Meanwhile, Citigroupis expected to begin layoffs next week, according to people familiar with the matter.

Citigroup is expected to cut between 5 percent and 10 percent of its staff of about 320,000, these people within the firm say.

Neither Citigroup's Chief Executive Vikram Pandit nor the firm's public relations staff have issued a formal announcement on the matter.

Citigroup has reported about $6.5 billion in third-quarter writedowns from mortgage-related losses and could face a total of $22 billion in writedowns.

National City, one of the 10 largest U.S. banks, said Wednesday it will eliminate 900 jobs as it stops offering mortgages through brokers.

The company also said it plans to raise more capital to help it cope with deteriorating credit markets, and hired Goldman Sachsas an adviser.

Chief Executive Peter Raskind said in a statement that National City needed to take "aggressive steps" to cope with disruptions in the mortgage, housing and credit markets.

Cleveland-based National City operates about 1,445 branches, mainly in U.S. Midwest states.

It has significant operations in Florida, Ohio and Michigan, which ranked second, third and fifth nationwide in foreclosures in November, according to RealtyTrac.


  • Jamie Dimon, CEO of JP Morgan Chase.

    JPMorgan Chase officials have not done enough to show how well the company is run, Chairman and CEO Jamie Dimon said on Wednesday.

  • A Qatari official stands near the FIFA World Cup trophy following its arrival in Doha.

    Qatar losing the right to host the FIFA World Cup is “within the realm of possibility,” Citi bank has said, with Wednesday’s arrests “bearish” for the Arab emirate’s banks.

  • Jamie Dimon

    JPMorgan Chase's officials haven't done enough to show what the company is doing right, leading to shareholders disapproval.