Morgan Stanley will cut its workforce by 1,600 in the coming weeks. The job cuts will affect all levels of employees in its investment banking and trading unit in both its United States and international divisions, according to a source.
Morgan Stanley (NYSE:MS), one of the leading banks in the United States plans to cut the number of its employees within its investment banking and trading division by 6 percent or 1,600 in the next few weeks, according to report from Bloomberg, citing an unidentified source familiar with the issue.
According to the source, 50 percent of the workforce reduction will come from the United States and 50 percent will come from the company’s international offices. The job cuts will affect all levels of employees.
The person who revealed the information requested his name not to be identified because the Morgan Stanley’s decision regarding the layoffs was not yet announced to the public.
The source said, the company is planning on sending notices to all the employees affected by the job cuts today and over the coming weeks.
Last year, Morgan Stanley reduced its workforce by 4,200. In December 2011, the company announced that it would cut 1,600 jobs.
James Gorman, chief executive officer of Morgan Stanley, previously stated that he will reduce costs as the company’s return on equity are still lower than its cost of capital.
Coincidentally, other major banks including Citigroup Inc. (NYSE:C) and UBS AG (NYSE:UBS) also announced their plans to lay off some workers. Citigroup would cut 11,000 jobs, and UBS would lay off 10,000 employees.
Meanwhile, yesterday, the bank announced the launching of the Morgan Stanley Investment Funds (MS INVF) Global Premier Credit Fund.
According to the press statement of the company, the fund aims to generate attractive risk-adjusted returns by investing in “premier credit,” the corporate debt issued by businesses and it is designed to help manage risk for investors against excessive business cycle shifts.
According to Christian Roth, global head of credit for Morgan Stanley Investment Management (MSIM), “The lack of clarity on the outlook for the global economy continues to generate volatility in the financial markets. With global sovereign debt now under intense scrutiny from investors, we believe there is scope for a product with the potential to provide investors with modest relative returns over the business cycle while protecting them from market pressures and extreme downside moves.”