Morgan Stanley plans to cut 6 percent of its institutional securities unit staff starting this week, two people familiar with the matter said on Wednesday in the latest sign of a pullback on Wall Street as revenue from trading and dealmaking remains in the doldrums.
Combined with related job cuts of support staff, Morgan Stanley's workforce reduction will amount to 1,600 people, said the sources, who were not authorized to speak publicly about the matter.
Morgan Stanley's institutional securities unit includes sales and trading, as well as investment banking. The cuts come in addition to a 6 percent staff reduction across the entire firm in 2012, the sources said.
Morgan Stanley does not regularly disclose the number of employees in its institutional securities business, but had 57,726 employees worldwide as of Sept. 30. The company is expected to report year-end figures in the coming weeks when it discloses fourth-quarter earnings.
Morgan Stanley and other banks have been dealing with a revenue drought in their trading and investment banking businesses, as activity remains weak, particularly in once-lucrative trading areas.
Its staff cuts come in addition to workforce reductions that took place or were announced last year at Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp.
Although Morgan Stanley's layoffs will affect all staff levels, it will be targeted at more senior employees who take in the biggest paychecks, said one of the sources.
About half of the job cuts will occur in the United States, with the rest affecting international units, said the source, adding that all levels of staff will be affected, with an emphasis on more senior employees.
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