Bank of New York Mellon to Axe 1,800 Jobs

Thu. November 20, 2008; Posted: 07:53 PM

(RTTNews) - Thursday, financial services provider Bank of New York Mellon Corp. (BK | Quote | Chart | News | PowerRating), announced that it would cut 1,800 jobs or about 4% of its global workforce of 43,000.

Commenting on the job cuts, the company's chairman and chief executive officer, Robert Kelly said, "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. We will take advantage of natural turnover to lessen the impact on existing staff."

The economical meltdown that started in the previous year with the fall of housing market and the rise of mortgage defaults, resulted in a 49% drop in the S&P's 500 Index current year, the largest ever since the Great Depression of 1930s.

For the third quarter, Bank of New York Mellon reported a 53% fall in its profit for the third quarter from a year ago, hurt by a huge charge taken to support money market and cash funds that were impacted by Lehman Brothers' bankruptcy filing in the latest quarter in addition to an increase in credit-loss provisions. However, the company's adjusted income from continuing operations for the quarter increased from the prior-year period.

Job cuts have been common in the banking sector, which has been battered by the ongoing credit crisis. The New York-based banking giant Citigroup Inc. (C) said that it plans to cut about 52,000 jobs and reduce expenses by 20% from their peak as the economic crisis worsens, the second biggest job cut proposal since IBM's 60,000 workforce reduction.

American Express Co. (AXP | Quote | Chart | News | PowerRating), which became a bank holding company earlier this month, said that it would cut about 7000 jobs, barely ten days after reporting a 24% decline in its third quarter profit.

As recently as last week, mutual fund major Fidelity Investments said it has plans to cut about 3,000 jobs.

BK closed Thursday's regular trading session $24.36, down $1.03 or 4.06%. In the after=hours trading, the stock is currently up $0.42 or 1.72% to $24.78. In the 52-week period, the stock has been trading in a range of $20.49-$50.26.

For full details on The Bank of New York Mellon Corporation (BK) click here. The Bank of New York Mellon Corporation (BK) has Short Term PowerRatings of 6. Details on The Bank of New York Mellon Corporation (BK) Short Term PowerRatings is available at This Link.

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