☰ Menu eFinancialCareers

Bloodbath coming at Bank of America?

Things are looking baaad for Bank of America bankers in Europe. Kenneth Lewis has indicated his intention to cut $7bn in costs from the combined B of A and Merrill Lynch operations by 2012. According to the calculations of the esteemed Henry Blodget, that means firing 20,000 people. Given that the average Merrill Lynch employee earned $248k last year, our calculations suggest layoffs could be even more substantial – if cost savings are to come from headcount reductions alone, 28,000 people could go.

Fortunately, person elimination isn’t the only method of cutting costs. And fortunately for Merrill Lynch bankers, most of the blood looks set to be spilt at Bank of America rather than Merrill.

“Our merger team is talking about the combined company, not just Merrill and not just Bank of America. “We will be looking at both to identify efficiencies,” Kenneth Lewis reportedly said during yesterday’s conference call.

The combined investment banking operations of the two companies are expected to be led by two Merrill men – Greg Fleming and Thomas Montag. B of A people, who are typically considered lower calibre than Merrill bankers (especially in Europe), may fall foul of the efficiency drive.

Bank of America’s wealth managers are most at risk in the US. In Europe, its structured credit, leveraged finance, and rates and FX teams are on shaky ground.

Merrill bankers might be favoured for the moment. But whether they’ll want to stick with Bank of America when (and if) markets improve is questionable. “Bank of America is notorious for paying big guaranteed bonuses to get people on board and then paying very little once the guarantees run out,” says one headhunter. “A lot of people have left as a result.”

Comments (22)

  1. “Given that the average Merrill Lynch employee earned $248k last year. ”

    Lies, dam lies and statistics!

  2. Who cares about the majority of the people who were made redundant, anyway? A disconcerting majority of them were just Essex lads and girls working as secretaries etc.

    Funny, I saw quite a few people in tears yesterday around Canary Wharf. Such kids. What sort of a person cries after losing their jobs?

    Nevermind dear, at least you’ll have your Gucci bag at home to look forward to. What made you buy that? The misconception that you were actually a valuable employee. Welcome to reality, dear.

    Happily employed in the City Reply
  3. “Given that the average Merrill Lynch employee earned $248k last year. ”

    That doesn’t make sense? That was equivalent to 125k last year – that’s what a 2nd year front office analyst (ie 22 year old) makes. Unless ML is 70% back/middle office (no chance) it’s more like $500k – a tad less than the average Goldman banker.

  4. It includes the thundering herd of poorly paid retail brokers. Merrill’s 2007 Annual Report shows total comp of $15.9bn. Total employees – brokers and cleaners included – 64,200.

    Sarah, Editor, eFinancialCareers Reply
  5. Sarah, how much of that has gone to the top management? I dont think that the first year analyst or clearer earned $248K last year..if yes..i would rather be cleaner than a banker!!

  6. Right, pretty misleading then. For the actual bankers not filtered down by the retail mess its more like $500-600k average.

  7. Is that honestly how much people make? I’m in the poor man’s sector.

  8. If all you bankers don’t know to take figures quoted as average with a pinch of salt, maybe you’re in the wrong business.

    Sarah didn’t write median.

    better at maths. Reply
  9. I think $248k is a lot of money. Perhaps the other people should get a dose of reality!

  10. Naturally there’s some uncertainty at Bank of America, but bloodbath is probably an exaggeration. We’re only one day into this, let’s wait and see what happens.

  11. ‘I think $248k is a lot of money’

    Maybe that’s why you’re a headhunter and I’m a banker…

    $248k is just 90k after tax. Sending 3 children to a top school (25k/yr) and family holidays alone costs 90k/yr. Add in your city flat, country house, holiday home, a couple of cars and a boat, you need 1m/yr once you’re a family man to survive, unless you want a heavily subsistent inferior lifestyle like most of this idiot nation. I think YOU need a dose of reality.

  12. Henry u are so far up your back side its unreal! get a load of u! I take it you’re not English. Hence the arrogance. and if u think this is a nation of Idiots – why don’t u clear off.. then instead of spending your time spamming the EFinancial comments space, i saw some of your dim incosiderate views regarding Lehman yesterday .
    $248k is not a bad salary to live,considering that a lot of people are over worked and under paid.
    Any ways – just wanted to make a point that Banana boy here (ei Henry) speaks out of his back side! to say the list!

  13. You are a funny guy Henry – i like it.

  14. Instead to pay high sums to the management and senior management, why wouldn’t they cut off a part of their salaries or make them redundend,.. that way money could be saved as well!

  15. exactly people like you need a dose of reality.. 2 cars..penthouse, countryhouse blablabla.. ultraexpensive family holidays,.. blablablabla..
    you live in your own world like many others.. if it collapses that they start crying like babys. have you ever asked yourself if your family loves you because you are a person, or because you have cash?????
    luckely I cannot complain, financially is more than enough (not 248K)
    and i’ll hope you will never cross my way..!!!!!

  16. If you spend 1 mill a year on stupid things like a boat, a sport car, or a fancy holiday home, I hope you are making much more than that. It is always stupid to waste money on doodads, and to waste such an amount of money it is incredibly stupid. But if you are making 5 mill a year, I think you are making a bad use of your time flooding this website with your posts.

  17. “have you ever asked yourself if your family loves you because you are a person, or because you have cash?????”

    Yeah, all those poor footballers who only get hot model girlfriends because they’re footballers and not their personalities. Poor them.

    For god’s sake. I get beautiful girls because I’m a banker. So what. I’d much rather have this glorious lifestyle than have to settle for the fat ugly people that waddle the streets of this idiot nation.

    Anon, how is a holiday home a “waste of money”? Its a good long-term investment.

  18. henry- you’re just an FX guy. there are a few of you on the steet now. be careful of your own job you idiot, especially as (you have told us often enough your compensation details) you are cheap to make redundant

  19. The problem isn’t if a $240k / yr salary is a lot or not…
    The main issue (and irony) relies in the other statement: “B of A people are typically considered lower calibre than Merrill bankers (..).” Are you serious! can you please tell me who was on the verge of bankruptcy ?!?!?
    Now $240 k / yr is very much questionable for an “average” Meryll employee who contributed (along with his above average seniors) in the bankruptcy of the bank.
    I guess that, at the end of the day, conventional banks having a safer stream of revenu from their corporate, retail and treasury activities turned out to be more reliable than investment houses such as Lehman, Goldman, Meryll… who I should admit did tremendous gains in the last decades but that were not enough to support a single “faux pas”.
    Now let us pray that the CDS market won’t have the same fate…

  20. Henry is nuts! Bring a third of all that you’re claiming you spend on blabla and change a life in Zimbabwe.

    $248k as a simple average is a lot, no wonder y ML almost slid. An a senior guy in the investment banking arm in Zim but am getting less than this average.

  21. whatruonabout? Of COURSE you earn zilch, you work in Zimbabwe goddamit.

  22. Who ever the idiot was that made the comment about essex boys and girls.
    A no brainer if ever, Ihope the Essex girls made redundant get thier nails into these idiot.
    I went thru this in the 1980s its not easy.
    So have a heart you bloody fool I hope you lose your job and then we will see what a no brainer can do BIG ISSUE i suspect

The comment is under moderation. It will appear shortly.


Screen Name


Consult our community guidelines here