Morgan Stanley To Trim Its Stock Traders

Dow Jones Newswires

Morgan Stanley plans to trim as many as 5% of its stock-trading employees early in 2016, part of an annual exercise to cull some of its less critical staff, people familiar with the matter said.

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The cuts will affect about 100 people globally and are based solely on performance, the people said. They aren't related to the Wall Street firm's recent decision to cut about 25% of its debt traders and salespeople.

Morgan Stanley's executives expect to end 2016 with roughly the same number of equities employees the firm will have at the start of the year, the people said.

Morgan Stanley isn't alone in pruning its workforce annually, in both good and slower years, with rival Goldman Sachs Group Inc. expected to shed some 5% of its employees in early 2016 as well.

Across big banks, executives are looking for ways to cut costs, reducing head count and travel budgets. Earlier this month, Morgan Stanley said it would take a $150 million charge related to cuts of 1,200 people firm wide, about 2% of the company's overall workforce. That move included the elimination of about 470 fixed-income and commodities jobs for salespeople and traders.

Those cuts reflect a slump in debt-trading revenue that set in during the summer months, and that now threatens to extend into 2016. The debt trading business faces more secular headwinds, including tougher capital rules and stricter limits on risk-taking that went in place after the financial crisis.

Morgan Stanley's equities business has flourished in recent years, overtaking Goldman as Wall Street's top stock trader by revenue. The performance compelled Morgan Stanley to elevate its head of equities, Edward Pick, to run all of the firm's trading business, including fixed income.

Throughout Wall Street, equities divisions have been flagged as a model for the post-crisis era, in part due to their emphasis on technology, fewer risks and leaner staffing. Morgan Stanley is shedding about 1,200 debt traders, salespeople and back-office employees who support the fixed-income division, The Wall Street Journal reported earlier this month.

(END) Dow Jones Newswires