Morgan Stanley is about to cut 1,600 jobs in an effort to cut costs.
This is about 6 per cent of the total headcount at the targeted section of the bank - the institutional securities group - which raises money for corporate lending and mergers.
Here's the FT:
Morgan Stanley will begin informing employees affected by the job cull in the coming days and weeks. A large slice of the trimmed positions will include highly paid senior bankers from the ranks of managing directors and executive directors.
Pay and bonuses for bankers “comes down because the amount of people in the business comes down,” Mr Gorman said in the FT interview in October.
Even with the additional cost-cutting, Morgan Stanley is targeting a much more modest return on equity than the pre-crisis levels of as much as 23 per cent. RoE is a key measure of a bank’s ability to make money for its shareholders.
“We’re generating 5 per cent, can we get back to 10 per cent? That’s much more interesting to me than can we get back to 15 per cent or will we ever get back to the glory days – those are completely flawed anyway,” said Mr Gorman.
We've already seen cuts at UBS, Citigroup, Deutsche bank and Credit Suisse - and Morgan Stanley seems the latest in the series. The cost-saving measures have followed new regulations that have restricted the banks' activities.