Merrill Lynch IT staff in London await their fate

Almost 2,000 staff are expected to be cut from Merrill Lynch's London operation and IT is likely to be in the firing line, as the Bank of America (BoA) attempts to cut overall employees by up to 35,000.

According to reports the banks are planning to cut about 30% of their combined London workforce.

Late last year BoA agreed a $50bn deal to buy Merrill Lynch which has about 8,000 employees in EMEA, including about 4,500 employees in UK.

The US bank would not comment on the 2,000 London jobs but a spokesman said, "We are just doing what we said we would do in September and reducing head-count by between 30,000 and 35,000."

John Thain, Merril Lynch chief executive, told the Financial Times last year that cuts would be in the corporate and services sectors, including IT.

The investment banking industry will see thousands of job cuts as mergers are completed and companies prepare for a slowdown in business. IT support is likely to be hit hard as firms scale down for lower business volumes and merging firms cut out overlapping roles.

But Ralph Silva, analyst at Towergroup, said the IT staff at Merrill are a valuable resource.

"Merrill Lynch operates in so many areas that it has many applications that the Bank of America does not have," Silva said. Merrill Lynch spent $1.121bn on IT and comms in the first months last year.

Robert Morgan, director at supplier outsourcing consultancy Hamilton Bailey, said, "Bank of America will want to integrate as many systems into its own infrastructure as soon as possible but it will be acquiring some major IT systems that it does not currently offer in its financial services portfolio, so conventional IT will be assimilated and jobs lost, but for specialist IT services it will need to retain the staff."