Merrill Lynch & Co., the largest stock brokerage firm operating in Orange County, plans to consolidate some operations here and across Southern California to bring down costs in a slowing economy.
The New York-based financial powerhouse, which ranked No. 1 by employees on the Business Journal’s February list of stock brokerages, is merging two OC offices this month.
Most of the administrative staff, financial consultants and stockbrokers in both offices will be relocated to other offices in the county.
“This is a part of a firmwide effort to cut costs,” said Bill Halldin, a Merrill Lynch spokesperson.
Workers at Merrill Lynch’s Southern California district administrative office in Irvine are set to relocate to the firm’s Costa Mesa office, which houses brokers and financial consultants. Eight of the Irvine office’s employees are set to relocate by the middle of the month.
And last week, Merrill closed down its San Juan Capistrano office, where it had seven brokers and financial consultants. They were relocated to the firm’s Laguna Hills office.
In August, Merrill plans to close down its Hemet office, which has four brokers.
“The common thread in all this is to cut costs,” Halldin said.
The consolidation doesn’t include layoffs at the two OC offices, Halldin said. Only the district administrative staff in the Irvine office plans to relocate, he said, while some workers are expected to stay on at the Irvine office for now.
This move will mark the first time in 15 years that a district office will function side by side with financial consultants and brokers. In the past, Merrill kept its district administrative operations, which oversees 50 branch offices in Southern California, separate from its asset-gathering brokers and financial consultants.
“Why should the two operations be separate in the first place?” Halldin said.
It makes more sense from an operations standpoint to combine the two offices, he said.
Like other investment banks, Merrill is wrestling with the tough market on Wall Street and fewer investment banking deals.
“It is not surprising,” said one analyst. “Merrill has been shutting down their small satellite operations nationwide.”
Last week, Merrill projected that its second quarter earnings could fall by as much as 50% and will be weak for the third quarter with a decline in stock and bond trading. The firm also said that it eliminated 1,600 jobs nationwide in the second quarter to trim costs.
“We are evaluating our structure throughout the country and looking for opportunities to bring people together,” Halldin said. “The firm is focused on teams working together to serve clients.”
Merrill is the latest casualty in the security industry to have fallen victim to the slowdown. San Francisco-based Charles Schwab & Co., New York-based Morgan Stanley Dean Witter & Co. and others have announced layoffs and cost-cutting as well.
But Halldin points out that along with consolidation, Merrill is expanding and adding more office space where required. In January, he said, Merrill opened an office in Irvine Spectrum.
“We have four financial consultants in that office,” Halldin said. “Orange County is very important and Merrill will continue its focus to service its clients here.” n
