We’ve already reported that the economic downturn has hit the private-jet market. Now it’s hitting Merrill Lynch employees who use private jets. Apparently, the bank’s senior managing directors have been barred from using private planes, unless they really, really need to.
Financial Times: Merrill Lynch has sharply cut the use of private jets among its senior managing directors by requiring them to obtain direct clearance from the global head of investment banking to hire one and to demonstrate there is no more efficient means of transport.
The new policy is part of a drive by the Wall Street bank to reduce administration and non-payroll expenses. By bearing down on these costs, Merrill aims to give itself the scope to limit lay-offs and pay better bonuses to top performers, even as the economic slowdown eats into investment banking revenues.
The restrictions on flying by private jet are also meant to demonstrate that the firm’s top brass must set an example to the rank and file in tightening belts. Other changes include requiring bankers to travel by taxi rather than limousine and reduced allowances for dinner on the job.
In other cost-cutting news, the FT notes:
Bankers at UBS are permitted to fly business class in Europe only if the flight is three hours or longer, or five hours or longer in the US.
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