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Considering that the two companies didn't even start talking about a merger until Saturday morning, it's way too soon to talk layoffs and other efficiencies. For now, Bank of America CEO Ken Lewis says the priority is to hold onto Merrill's powerful brokerage and investment banking operations. But he also wants to realize cost savings in this deal, so layoffs and branch closures are almost certainly down the road. From Dow Jones:
What both firms took great pains to emphasize Monday was their interest in keeping Merrill Lynch's stockbrokers happy - and in their seats. The acquisition gives Bank of America control of the country's largest group of stockbrokers, who have increasingly narrowed their focus from average investors to wealthier clients over the past decade. Merrill stockbrokers are "the crown jewel of Merrill. It's the heart of Merrill. We will keep the name and keep the organization intact," said Bank of America's Lewis. Merrill CEO John Thain said during the press conference call that he believed Merrill's brokers would profit by gaining access to Bank of America's high-net worth banking customers, and added that so far, the sales force appears to be happy with the impending deal.
Just looking at their respective Web sites, Merrill Lynch has 18 branches in L.A. and Orange counties, while Bank of America has 25 branches in just the immediate L.A. area. So there will be a lot to digest, though not for some months. Also keep in mind that B of A is still sorting out the purchase of Countrywide earlier this year. Right before its deal with Countrywide was finalized, Bank of America said it would slash 7,500 jobs over two years. The combined companies had employed about 60,000 people in their overlapping mortgage, home-equity and insurance businesses, according to the LAT, so the reductions would amount to about 12.5 percent of the workforce. Pink slips were scheduled to go out in the current quarter. All told, Countrywide folks are likely to have a much tougher time holding on than the employees at Merrill.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.