Corporate cost-cutting spills over to branches, dampens enthusiasm.
Merrill Lynch brokers are applauding the firm's cost-cutting measures, including 1,800 layoffs in the brokerage division to reduce the "bloated bureaucracy" they say was mushrooming at headquarters.
But some of those cutbacks are hitting a little too close to home. Several producers complain that hiring freezes are preventing them from adding much-needed sales assistants.
"If they need to tighten up the ship, that's fine, but don't beat up the people who are bringing home the bread," says a broker in the Southwest whose office has a hiring freeze.
A rep in the Southeast also says his branch has a hiring moratorium in place. The firm is "cutting costs everywhere" because, in his view, it's being polished up for an eventual sale. "Buy lots of Merrill Lynch stock right now," he says.
Another producer in the Southeast confirms that marketing budgets, especially money for seminars and other promotions, is tighter than ever. Those restrictions are inhibiting growth, he says.
"Stan O'Neal has done a wonderful job trimming the fat and making this company leaner and meaner," the broker says. "But now they're taking resources away from the individual FCs. I can't understand why they're cutting back so drastically during the best economy we've ever had."
A Merrill rep in the upper Midwest adds that several sales assistants in his office were laid off this summer, possibly because the branch was not in compliance with Merrill's ratio of one sales assistant per $1 million of production. "Where those ratios are out of balance, the firm is starting to correct," he says.
Merrill Lynch spokesperson Susan Thomson says that staffing levels for assistants are generally based on the number of "priority households" (accounts with $250,000 or more) served by a branch, along with branch productivity.
Thomson declines to comment on spending cutbacks or the 1,800 layoffs, which Merrill announced internally in July but never publicly confirmed.
About a month after Merrill Lynch announced corporate staff reductions in July, the firm abandoned its ambitious Web-based retailing sites, called www.shopmerrill.com and www.merrillauctions.com (see April 2000 RR, Page 26), and eliminated the staff in those units.
"It's amazing how little business we were actually doing on those sites," says a veteran producer in the Midwest. Merrill will refocus its e-commerce efforts on the business-to-business segment, mainly through an online site called the Merrill Lynch Business Center.