Analysts go in Merrill 'cull'

The pace of job cuts in the City has accelerated, with further lay-offs at investment banks Merrill Lynch and Lehman Brothers.

Merrill, which a year ago offered voluntary redundancy to all its staff, cut as many as 15% of its 160-strong equity research team in London this week. Sources described the move as a "cull" of analysts.

Lehman Brothers, another Wall Street firm, is understood to be letting 4% of its total 13,000 workforce go.

City sources say that redundancies are now regarded as a common event at large US-owned firms, with positions being shed almost every week. This is regarded as significant ahead of the traditional bonus season which is expected to lead to poor payouts for many City workers.

Merrill Lynch refused to confirm that it had made redundancies this week, nor would it give any indication about the scale of the cut-backs.

A spokesman said that the firm was continuing to "manage our resources including our expenses and head count in line with the business environment".

"This means that while we may reduce head count in some areas, we are selectively hiring in others," the spokesman said. He added that the "bulk of staff reductions" had been made.

Even so, the City believes that the latest cuts at Merrill's research team indicate the extent to which the firm needs to reduce costs in those areas no longer regarded as core.

It is thought to have hired a handful of analysts in areas which it regards as crucial, such as oils, banks and insurance.

Lehman Brothers, which let 80 investment bankers go earlier this month, said yesterday it had made "small adjustments" to all areas of business.

Among the latest to leave is Jeffrey Applegate, a stock market strategist who was well-known for his bullish stance.