The Bank of New York Mellon said Wednesday it will cut about 1,500 jobs, or 3 percent of its workforce, the latest sign of the banking industry’s painful shrinking.
Chief executive Bob Kelly noted that the bank’s revenue has been growing but added that “expenses have been growing unsustainably faster.” The bank said it hasn’t yet determined what types of jobs will be cut or where. It said it would try to minimize layoffs with a hiring freeze and by reducing the use of temporary workers, consultants and contractors.
The banking industry also resorted to layoffs during 2008 and 2009, as the financial crisis pummeled earnings and banks took government bailouts. But 2010 provided some relief, and banks hired back some of their laid-off workers.
Banks have been cutting jobs again in recent months. Goldman Sachs Group and State Street, among others, each announced last month that they would lay off about 3 percent of their workforces.
What makes these cuts different from the layoffs of 2008 and 2009 is that they’re coming at a time when many banks are posting improved profits. Analysts say the latest cuts point to permanent structural changes as the banking industry becomes smaller, less risky and also less profitable.
— Associated Press
Wholesale companies added more autos, machinery and computers to their stockpiles in June, pushing inventories up for the 18th consecutive month.
Sales at the wholesale level rose 0.6 percent in June, the Commerce Department said Wednesday. That followed a 0.3 percent drop in May. Sales have risen in 10 of the past 12 months.
Stockpiles increased 0.6 percent in June after a 1.7 percent gain in May. Wholesale stockpiles have risen to $458.7 billion, up 19.6 percent from the low point hit in September 2009.
For June, stockpiles of autos rose 4.3 percent, computers gained 3.5 percent and machinery increased 1.8 percent.
The ratio of inventories to sales was unchanged in June at 1.16. That means it would take 1.16 months to exhaust the current level of stockpiles.
— Associated Press
l Cisco Systems, the world’s largest maker of computer-networking equipment, fared better than analysts anticipated in its latest quarter. The technology bellwether’s net income fell 36 percent from a year ago. But that was because of a $772 million charge before taxes to cover the elimination of 6,500 jobs, which the company announced last month.
l Groupon, the biggest provider of online coupons, reported losses for the second quarter and the prior year after backing away from an accounting method scrutinized by U.S. regulators. Groupon abandoned controversial figures for adjusted consolidated segment operating income, or adjusted CSOI, in an amended initial public offering filing Wednesday. The Securities and Exchange Commission was examining that accounting practice in a routine review of Groupon’s proposed $750 million IPO.
l Macy’s reported a 64 percent increase in second-quarter earnings, becoming the first major retailer to post results following a downgrade of U.S. debt last week that led to growing fears among consumers about the possibility of another recession. The department store chain, which also boosted its full-year outlook, said its strategy of tailoring merchandise for local markets is helping it to overcome an overall sluggishness in the economy.
l Employers posted more job openings in June and layoffs fell, a sign that hiring could improve in the coming months. The number of available jobs rose to 3.1 million, up from 3 million in May, the Labor Department said.
l Johnson & Johnson and Gilead Sciences won approval by the Food and Drug Administration of a once-daily HIV treatment that combines multiple medicines into one tablet. The combination product is Complera.
— From news services
l 8:30 a.m.: Initial jobless claims report.
l 8:30 a.m.: International trade report.
l Earnings reports: Elizabeth Arden, Kohl’s, Nordstrom, Sara Lee.
— From news services