The $9 billion check that saved Morgan Stanley.
Morgan Stanley, the sixth-largest U.S. bank by assets, plans to eliminate about 1,600 jobs from its investment bank and support staff in coming weeks, a person with direct knowledge of the matter said.
The cuts total about 6 percent of the New York-based company’s institutional securities group, which includes investment banking and trading units, and support staff, the person said, asking not to be identified because the decision hasn’t been made public. About half the reductions will be in the U.S., the person said.
Morgan Stanley reduced staff by about 4,200 people in the first nine months of last year through job cuts and unit sales, after saying in December 2011 it would trim 1,600 jobs. Chief Executive Officer James Gorman, 54, has pledged to lower costs as return on equity remains below the bank’s cost of capital.
All levels of employees will be affected, with a focus on senior workers, the person said. The cuts will be distributed across all investment banking and trading units, and some workers have already been notified, the person said.
Morgan Stanley, which had 57,726 employees as of Sept. 30, has laid out a plan to cut $1.4 billion of annual expenses by next year. The firm produced a return on equity of about 5 percent in the first nine months of 2012, excluding charges related to its own credit spreads. That’s below Gorman’s target of 15 percent.
Details from Bloomberg:
Half the job cuts will be in the U.S. and half overseas.