Morgan Stanley is cutting around 1,500 jobs worldwide as the Wall Street bank prepares for an uncertain 2020.
Two people familiar with the situation confirmed the cuts, which account for around 2.5 per cent of Morgan Stanley’s global workforce.
A third person said the reduction was slightly more than the bank typically makes at year-end and reflected the lack of clarity on the outlook for 2020, when US President Donald Trump’s trade war, the US presidential election and Brexit could all hit banks’ performance.
“It’s robust cost management,” the person said. “We’re not making a big call that the environment is going to be much worse next year . . .[but] we’re cautious that it might not be better.”
The cuts differed from a cull in 2015, for example, when Morgan Stanley cut 1,200 jobs from its fixed income division after deciding that the economics of some areas of fixed income trading had permanently worsened, the person added.
The heaviest lay-offs this time fall on Morgan Stanley’s technology and operations division. Two of the people said that the bank is not cutting back on tech investments and that the cuts partly reflect the fact that some activities can now be done more efficiently.
The other cuts will be spread across the bank, from investment banking to wealth management and trading, and will include some managing directors. Most of those leaving have been told their fate in the last few weeks, one of the people said.
The job losses, which were first reported by Bloomberg, follow a strong third quarter, when Morgan Stanley notched up its highest-ever revenue for that period of the year, and significantly outperformed closest rival Goldman Sachs in key areas including bond trading.
On a call with analysts following the earnings, James Gorman, Morgan Stanley chief executive, warned of the potential impact of “trade and political uncertainty, economic growth concerns and central bank responses” and said that the bank’s chief executive clients were “obviously concerned” about the direction of US trade talks.
Other banks have also been trimming their costs this year, including Citigroup, which began cutting hundreds of jobs in July in response to challenging market conditions, and Deutsche Bank, which has vowed to cut 18,000 jobs across its business by 2022 as part of a restructuring plan.
Investors may get more detail on future cost-cutting measures over the coming days, as senior executives from Bank of America, Citigroup, Wells Fargo and JPMorgan Chase speak at a Goldman Sachs financial conference on Tuesday and Wednesday.