Wall Street hit by big bonus cuts

Merrill Lynch & Co plans to cut year-end bonuses in half after more than $20 billion of losses that forced the US securities firm to sell itself to Bank of America Corp, according to sources.

The average bonus reduction will be about 50 percent at the New York-based company, and some traders and investment bankers will face steeper cuts, said the sources, who declined to be identified because the plans aren't public. While employees won't find out their bonuses until later this month, division managers are being told now how much they'll get to distribute.

Merrill's revenue through September fell 96 percent from a year earlier, forcing Chief Executive Officer John Thain to slash compensation - the firm's biggest expense. Legislators and regulators scrutinizing Wall Street pay have sought to ensure that economic-rescue funds from the US government are used to stimulate lending and not to enrich executives.