Merrill Lynch & Co., the biggest U.S. brokerage, plans to cut about 500 jobs in its trading division as Chief Executive Officer John Thain shrinks the workforce to gird for a recession, three people with knowledge of the plan said.

Merrill may notify affected employees as soon as this week, according to the people, who declined to be identified because the decision hasn't been disclosed publicly. The cuts, which make up about 1 percent of New York-based Merrill's 60,900 employees, will be global and include traders and institutional salespeople in the firm's fixed-income and stock departments, two of the people said.

Merrill spokeswoman Jessica Oppenheim declined to comment.