Merrill Lynch Freezes Hiring, Halts Merit Pay

Merrill Lynch & Co., the nation’s largest brokerage firm, has told its staff that it will freeze hiring and halt merit pay increases, citing a worsening market.

The brokerage said it expects pressure on profits to intensify because of “the continued uncertainty in the Middle East and weakness in the U.S. and other economies,” according to an internal memo dated Nov. 19. A copy of the memo was obtained by Reuters.

Merrill Lynch’s moves are yet another sign of troubles on Wall Street, where dwindling trading volume, a pullback by retail investors, sagging economic growth and the threat of a Mideast war have sapped profits and led to severe cutbacks.

The number of workers in the domestic brokerage and investment banking business have tumbled by about 47,000 to 216,000 at midyear from its peak in 1987, industry experts say.

The Merrill Lynch cost-cutting measures were introduced “in light of worsening market conditions,” said the memo sent to company managers from President and Chief Operating Officer Daniel Tully.

The freezes at Merrill Lynch take effect immediately. The hold on merit increases will be in effect throughout 1991, the company said.

The brokerage also placed restrictions on the hiring of temporary employees, entertainment and travel budgets and expenditures, such as personal computers, throughout 1991.