NEW YORK - Merrill Lynch & Co. said yesterday that it is offering its 65,900 employees a severance package that may be worth more than one year's salary as leaders of the biggest securities firm accelerate cost-cutting efforts.
Employees will have between Monday and early November to accept the offer, said spokesman Joseph Cohen. Those who decline the offer, the first of its kind at the 116-year-old firm, risk being fired in the drive to shore up earnings.
"There are probably a few stressed-out people who might take them up on that," said Geoff Hance, an analyst at Northern Trust Corp., which owned 7.7 million shares of Merrill as of June. "They have probably got people in their 50s who might look at that offer pretty darn seriously."
Unwilling to forecast a rebound after third-quarter net income sank 52 percent, Merrill executives are trying to slash expenses. President Stanley O'Neal said after earnings were announced yesterdaythat an overhaul replacing the heads of the four business units in the past month was intended to "reshape the cost base."
All Merrill staff will receive a memo detailing the offer Monday, according to Cohen. Employees who accept will receive a severance that may equal more than one year's salary, depending upon length of service. They will also get a "significant" portion of their year 2000 bonuses, Cohen said. Employees need their manager's approval to accept the offer.
Executives have not commented on a Wall Street Journal report this week that O'Neal intends to fire as many as 10,000 employees at a cost of more than $1 billion.