Morgan Stanley cuts 1,600 jobs to reduce cost
The sixth largest US bank by assets is going to cut senior staff from the securities unit and also plans to promote the smallest number of employees this month since early 2009, according to people familiar with the situation. The move is expected to save several million dollars of managing directors’ salaries annually.
About half the 1,600 layoffs will be made in the US, the bank said. These cuts follow a reduction of 4,200 employees through the first nine months of 2012. In July Morgan Stanley CEO James Gorman announced plan to reduce overall staff by 7% in 2012.
Meanwhile, Morgan Stanley doesn't expect to make any cuts among its roughly 16,800 financial advisers team, according to the Wall Street Journal. The unit, which focuses on dealing with volatile global markets, provides more stable revenue than the banking businesses.
Morgan Stanley follows the example of other big investment banks, including Credit Suisse, Deutsche Bank, Citigroup and UBS that have made significant layoffs to reduce costs. Last year Citigroup Inc. said it would cut 11,000 jobs, and UBS AG said it would cut 10,000 positions worldwide.
Bank of America, Citigroup, Wells Fargo & Co., Goldman Sachs and Morgan Stanley together have cut over 30,000 jobs since June 2011. Only J.P. Morgan Chase boosted staff in the 2011, adding 12,787 jobs in an effort to clean up its mortgage business and cut 1,000 of the worst-performing staffers. In total US financial firms announced plans to slash their workforce by 38,135 jobs in 2012, according to employment consulting firm Challenger, Gray & Christmas.