Wall Street investment bank Merrill Lynch reported Thursday a first-quarter loss of nearly two billion dollars due to massive writedowns, and said it would slash 10 percent of its workforce.
The company said the net loss in the first three months of the year was 1.96 billion dollars, compared with net profit of 2.16 billion in the 2007 first quarter.
Earnings per share were 2.19 dollars, sharply higher than analysts' consensus forecast of 1.99 dollars.
Revenue for the quarter ending March 28 fell to 2.93 billion dollars from last year's 9.6 billion, primarily because of approximately nine billion dollars in asset writedowns.
Of those, 1.5 billion dollars were written off in US asset-backed securities linked to the mortgage crisis, nearly one billion on investment fund loans and three billion linked to municipal bond insurers.
Merrill Lynch said it plans to cut its workforce by 4,000 employees, or 10 percent, from year-end 2007 levels.
The bank expects to record a 350-million-dollar charge in the second quarter related to the job cuts, which it forecast would lead to cost savings of 800 million dollars on an annualized basis.
"Despite this quarter's loss, Merrill Lynch's underlying businesses produced solid results in a difficult market environment," John Thain, chairman and chief executive, said in a statement.
"The firm's 82-billion-dollar excess liquidity pool has increased from year-end levels, and we remain well-capitalized," he said.
Shares in Merrill Lynch jumped 2.07 percent to 45.82 dollars around 1415 GMT.
In 2007, Merrill Lynch reported writedowns of 11.5 billion dollars, mainly related to the US home loan crisis, that plunged the bank into an annual loss of 7.8 billion dollars.
