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In a move that underscores how badly things are going on Wall Street, Merrill Lynch & Co. (NYSE: MER) has announced a freeze on new hires through the end of the year.

The freeze, which excludes retail brokers, extends to previously budgeted posts as well as replacement hires, according to Bloomberg News, which broke the story. Any exceptions to the policy need to be approved by a member of the management committee.

Merrill Chief Executive John Thain clearly is looking to save money; racking up $19 billion in losses will do that to a person. Though Thain has vowed to maintain the firm's dividend, options traders are betting that he will break his promise, according to a separate Bloomberg account. Heck, anyone who can read a balance sheet has reached the same conclusion.

Thain has already eliminated 4,200 jobs this year, which he says will result in more than $900 million in annual savings, Bloomberg notes, adding that "Merrill slashed compensation and benefits, the firm's biggest expenses, by 20 percent this year to about $7.7 billion. Reducing headcount by attrition may be a cheaper way of cutting costs than mass layoffs."

Merrill has what investors like to call a "credibility problem," which is not getting resolved anytime soon. Holders of the stock, including one of my relatives who ignored my advice to dump it months ago, are in for a tough slog.

Headhunters of the world be prepared, your email in-boxes are about to overflow.

Merrill Lynch imposes hiring freeze originally appeared on BloggingStocks on Thu, 14 Aug 2008 17:20:00 EST. Please see our terms for use of feeds.

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