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10 December 2019

Morgan Stanley plans to cut around 1,500 jobs in year-end cuts

The cuts are skewed toward technology and operations divisions, but also include executives in sales, trading and research operations—the reduction is around two per cent of the firm’s workforce.

Morgan Stanley/Bloomberg

Morgan Stanley is cutting about 1,500 jobs globally, including several managing directors, as part of a year-end efficiency push, reported Bloomberg.

Investment banks around the world have been trimming staff amid a multiyear slump in trading revenue and the expectation that more of the business will move to electronic platforms that require fewer humans.

Citigroup and Deutsche Bank are among firms that have cut hundreds of trading jobs this year.

The Wall Street bank has been in the spotlight for an investigation into its currency-options desks. The bank is probing whether traders improperly valued the esoteric securities, concealing as much as $140 million in losses.

The cuts being carried out also include senior executives in its currency and bond desks in New York and London.

Chief Executive Officer James Gorman began slashing a quarter of the fixed-income workforce in 2015 and sold off large pieces of the commodities operation, concluding that new rules had permanently damaged prospects for the industry.

Morgan Stanley, which reported a 21 per cent increase in fixed-income trading revenue in the third quarter, generated $5 billion from the business last year.

The strategy has largely paid off, with Morgan Stanley gaining market share even while it reduced headcount and capital dedicated to the business. Analysts expect the bank to end 2019 with 10 per cent more fixed-income trading revenue than in 2015, while rival Goldman Sachs Group’s total is seen dropping about 20 per cent in the same period.

RELATED STORIES: Morgan Stanley Citigroup





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