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January 10, 2013 at 08:55 AM
Morgan Stanley (MS) plans to cut 1,600 jobs, mainly in its investment banking and other institutional-services operations in the United States and overseas, a source said on Wednesday. No financial advisors are being let go as part of the latest cost-cutting move, according to the company, which is led by James Gorman.
The cuts represent about 6% of staff in the institutional operations, namely investment-banking traders and salespeople, which experienced a similar level of layoffs in 2012.
“It is a response to the continued, sluggish business environment as well as regulatory changes, and very much in line with what the other global banks are doing,” the source explained in a statement shared with AdvisorOne.
Very few of the cuts will be in the wealth-management business, added the source, noting that these operations have already gone through “a meaningful headcount reduction over the past two years as part of the Smith Barney integration process.”
“Retail [advisor business] has risen in stature at the major wirehouses, because it’s a Steady Eddie source of revenue,” said executive-search consultant Mark Elzweig, in an interview. “Taking risk is out, and plain vanilla fee-based business is in.”
