Morgan Stanley Plans to Cut Over 1,000 Jobs
Morgan Stanley will slash more than 1,000 jobs in the coming week, trimming costs ahead of what it expects will be a tougher business environment, a person briefed on the moves said Thursday.
The investment bank, which posted $9.4 billion of fourth-quarter losses from mortgage trading and other assets, is cutting jobs mainly in wealth management and investment management, back-office operations and technology staff, the person said.
With financial markets and investment banking expected to slow this year, Morgan Stanley will need to keep costs in line with lower revenue.
Morgan Stanley confirmed it will eliminate jobs but declined to elaborate on where cuts will be made or expected cost savings.
"The firm is engaged in an ongoing process of assessing its personnel needs in light of overall market conditions, business priorities and individual performance. This process will involve head-count reductions in some areas and additions in other areas," the bank said in a statement.
There will not be "substantial" cuts in its institutional securities division, which includes the trading and investment banking businesses that generated losses last year, the source said.
The person noted Morgan will be adding staff in some businesses, including more financial advisors and expanding its investment management offerings.
Overall, the net reduction of jobs represent a little more than 2 percent of the 48,256 people employed by Morgan Stanley at the end of November.
"We're battening down the hatches a little bit. It's not a significant deal," the person familiar said.
Shares of Morgan Stanley fell $1.31, or 2.5 percent, to $50.50 in early afternoon trading on the New York Stock Exchange.
Morgan Stanley, which last month announced a fourth-quarter net loss driven by trading losses, sold a $5 billion equity stake to China and warned it expected business to decline in 2008.
Chief Financial Officer Colm Kelleher told Reuters at the time the bank would suspend buybacks and "reallocate resources" from areas that "don't need it."
The latest cuts follow the elimination of 600 mortgage jobs last year. Morgan also cut 300 jobs in investment banking and securities trading.