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Top Firm Imposes Hiring Freeze

last updated: 15 August 2008
In sharp contrast to rival Morgan Stanley, Merrill Lynch has imposed a global hiring freeze for the rest of 2008. The freeze will be imposed across the board, excepting the firm's retail broking unit, and will even apply to positions where budget has already been allocated. The freeze covers both permanent and temporary positions, and includes replacement hires. Exceptions will be considered, but all applications will need to be submitted to Merrill's Management Committee.

Here's the memo sent out to staff earlier this week:

'Expense Management Initiatives

Dear Colleagues:

As we focus on returning the firm to profitability, it is extremely important that we all manage expenses prudently. As a result, the Management Committee has decided to take the following actions effective immediately:

  • A global hiring freeze will be in place for the remainder of the year. This freeze covers any incremental hires including previously approved budgeted hires and replacement hires. This policy does not apply to financial advisors or client associates who the firm will continue to recruit and hire in line with business plans.
  • No on-boarding of contingent workers will be permitted for the remainder of the year. This includes all temporary help, contract workers and independent contractors. Renewals of existing agreements are also not allowed.
  • No new management consulting assignments may be entered into until further notice

    Any request for an exception to one of the above actions must be presented in writing to the Management Committee by an executive sponsor with the title Senior Vice President or higher. Approval of an exception can only be made by a member of the Management Committee.

    Typically, the majority of the firm's hiring occurs during the first and second quarters of the year with the third and fourth quarters progressively tapering off. To ensure Merrill Lynch is well positioned in 2009, the Management Committee is working on strategic growth plans consistent with our business priorities. The growth plans will provide us with a blueprint for where our hiring activity will be focused in 2009.

    Finally, The Financial Times reports that the $29bn Merrill has lost in the last 12 months could result in the firm being able to offset some $8bn against future UK tax liabilities. The newspaper reports that most of the firm's losses have been booked through its UK subsidiary and that, should Merrill make future profits based 2006 levels, the UK business may not have to pay corporation tax for as long as the next 60 years!

    If you have any questions, please contact your Human Resources representative'

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    Sources - The Financial Times, The New York Times