Friday, 21 November 2008

Bank of NY Mellon to cut 1,800 jobs

NEW YORK (Reuters) - Bank of New York Mellon Corp on Thursday said it plans to cut 1,800 jobs as falling equity markets reduce the assets it oversees, cutting into potential profit.

The reductions affect about 4 percent of the New York-based company's 43,000-person workforce, with the bulk beginning in January and continuing through 2009, spokesman Ron Gruendl said. Some cuts will come through attrition, the bank said.

Bank of New York Mellon declined to say which businesses or geographic regions will be affected.

Thursday's cuts are not related to Bank of New York Co's $18.3 billion purchase in July 2007 of Pittsburgh-based Mellon Financial Corp, which created Bank of New York Mellon. The merger was expected to result in 3,900 job reductions.

"It has become clear that we need to take additional steps beyond our merger synergies to reduce expenses, given the current weakness in the global economy," Chief Executive Robert Kelly said in a statement.

Bank of New York Mellon is the world's largest custodian of assets for institutional investors and one of its biggest asset managers and even before this quarter's stock market selloffs had seen assets decline.

Assets under custody fell to $22.4 trillion as of Sept 30 from $23 trillion three months earlier, while assets under management fell to $1.07 trillion from $1.11 trillion.

Third-quarter profit fell 53 percent from a year earlier, largely because of a charge to bail out money market funds.

Bank of New York Mellon joins other asset managers to announce job cuts over the last few weeks, including: Fidelity Investments, Janus Capital Group Inc, Legg Mason Inc, MFS Investment Management and Putnam Investments. MFS on Thursday announced 90 job cuts, or 5 percent of its workforce.

Last month, the bank said it would receive a $3 billion capital injection from the U.S. Treasury Department. It was one of the nine original banks to receive funds from the government's $700 billion bank rescue package.

Shares of Bank of New York Mellon closed Thursday down $1.03 at $24.36 on the New York Stock Exchange. They have fallen 50 percent this year.

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