Bank of New York Mellon Corp. said Wednesday that it will cut about 1,500 jobs, or 3 percent of its workforce, the latest sign of the banking industry’s painful shrinking.
CEO Bob Kelly noted that the bank’s revenue had been growing but added that “expenses have been growing unsustainably faster.” The bank said it hasn’t 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 even hired back some of their laid-off workers.
Goldman Sachs faces mortgages suit
The U.S. regulator of credit unions Tuesday sued Goldman Sachs & Co. for more than $491 million in damages over losses incurred by two failed credit unions that purchased mortgage-backed securities underwritten by the investment bank.
The complaint filed by the National Credit Union Administration in U.S. District Court in Los Angeles is the latest lawsuit brought by the federal regulatory agency against a major bank as it seeks to recover billions in losses related to risky mortgage-backed securities that brought down credit unions in recent years.
Buyers of mortgage-backed securities, mostly banks, pension funds and other big investors, made money from the investments if the underlying debt was paid off. But as U.S. homeowners started falling behind on their mortgages and defaulted in droves in 2007, the securities failed and their buyers lost billions.
Wal-Mart Stores ending MP3 sales
Wal-Mart Stores Inc. is ending its digital music sales this month after seeing increased competition.
The world’s largest retailer confirmed Tuesday that it will stop selling MP3s as of Aug. 29. Customers who already bought digital music through its site may continue to use and manage their music there.
Wal-Mart began selling digital music in 2003 to compete with Apple’s iTunes, which has become the largest seller of digital music. The company also faces tough competition from Amazon.com.
The company said it will now concentrate its digital efforts on its Vudu.com video-streaming service, which it acquired last year.
N.Y. judge rejects shoe maker’s claims
In a court case that has all sides seeing red, a judge said Wednesday that a French maker of luxury shoes worn by stars such as Sarah Jessica Parker, Scarlett Johansson and Halle Berry will likely fail in its effort to stop other shoemakers from producing high-heeled women’s shoes with red soles.
U.S. District Judge Victor Marrero refused a request by Christian Louboutin to stop the sale of women’s shoes with red soles by competitor Yves Saint Laurent S.A.S., another French company. Though the ruling came at an early stage of consideration of a lawsuit Louboutin brought in April, the judge said it will probably be tossed out.
He said it was unlikely Louboutin could defend an “overly broad” trademark granted in 2008 by the U.S. Patent and Trademark Office.
