UK
Merrill Lynch has spent $39m in the third quarter of this year trimming headcount within its technology division.
The exact number of IT staff who have been shown the door is undisclosed, but the bank says it’s shelled out nearly $40m through severance packages and the accelerated payment of stock options for employees “primarily in technology”.
Merrill has reduced headcount by 3,300 since this time last year, mainly within its investment banking and operations divisions.
Ironically, it has spent 9% more on communications and technology this quarter – to $546m – due to “ongoing technology investments and system development initiatives”. Up until recently, Merrill accounted for 2.9% of all IT spending in the US securities and investment services industry, according to Tabb Group.
Citi, which also released its third-quarter results today, has been freely wielding the axe, revealing that it had trimmed headcount by 11,000 since Q2. This brings the total number of redundancies at Citi this year to 23,000.
Earlier this year, Citi said that it could cut IT spending by up to 20%. Meanwhile, analysts at Celent believe that the bigger banks will reduce technology budgets by up to 15% this year.
Research by IT consultancy Forrester echoes this gloomy sentiment, with 49% of senior IT managers within banks in the US and Europe saying they’d already slashed technology budgets.
Conversely, 69% of CIOs within Asia-Pacific banks have been given the green light to increase their technology spend, according to a survey by research and advisory firm Financial Insights.
Update on this story: Obviously the $39m Merrill spent trimming its IT heacount in Q3 was only the tip of the Iceberg. John Thain has since announced that the firm will seek savings of $7bn as it merges with Bank of America, resulting in thousands of job cuts, largely in technology.