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Morgan Stanley to cut more jobs

May 06, 2008|From Times Wire Services

Morgan Stanley, the second-biggest U.S. securities firm, plans to reduce head count as much as 5% in the next few months after wrong-way bets on sub-prime mortgages saddled the bank with a $3.6-billion fourth-quarter loss.

Mark Lake, a spokesman for the New York company, confirmed the job cuts, which will come mainly in the U.S. and won't affect the firm's retail business.

Morgan Stanley, which employs about 47,000 people, already has shed at least 3,000 jobs since October.

The world's biggest banks and securities firms have cut at least 50,000 jobs in the last year after write-downs and credit losses from the collapse of the sub-prime mortgage market totaling more than $300 billion.

About 100,000 jobs may vanish by the time the current round of cuts runs its course, said analyst Jo Bennett at executive search firm Battalia Winston International.

Morgan Stanley's fourth-quarter loss was its first as a publicly traded company. It had to raise $5 billion in capital by selling convertible securities to China Investment Corp., the state-owned investment fund.

Morgan Stanley shares fell $1.59, or 3.2%, to $48.72. They dropped 21% last year and are down 8.3% this year.

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