Morgan Stanley is reportedly cutting hundreds of bank jobs in its wealth management division as part of cost-cutting measures implemented by new Wall Street CEO Ted Pick.
According to the Wall Street Journal, the company plans to cut executive directors and other non-customer-facing employees. The company was the first to report planned job cuts.
The expected job cuts are expected to affect less than 1% of the division, which has about 40,000 employees, the newspaper said.
Last quarter, revenue from Morgan Stanley’s wealth management unit was flat from a year earlier, and the business’ medium-term profit margin forecast was lower than some analysts expected.
The asset management division became a major cash cow for the bank after it made major acquisitions such as Eaton Vance and E-Trade under former CEO James Gorman.
The job cuts are the latest in a series by the Wall Street firm since last year, citing job cuts stemming from its $13 billion acquisition of E*Trade in 2020, people familiar with the matter told the Journal. Told.
Following the acquisition of E*Trade, the asset management division now manages approximately $5 trillion in assets, accounting for approximately half of the bank’s total revenue.
The division has helped Morgan Stanley rely less on its traditional core businesses, trading and investment banking, where earnings can be volatile.
Last month, the bank’s new CEO, Ted Pick, reiterated Gorman’s goal of reaching $10 trillion in assets under management.
Morgan Stanley declined to comment.
The company’s stock was trading flat on Wednesday.
The cost-cutting decision marks Mr. Pick’s first major move since replacing Mr. Gorman earlier this year.
Gorman took the helm of the bank shortly after the 2008 financial crisis and held the top job for more than a decade. He will continue to serve as Executive Chairman of Morgan Stanley.
Before being named CEO, Pick, 54, had a reputation as a hard-talking executive who loved to party, the Post previously reported.
He has been with the bank for 30 years, leading its institutional securities division, which is home to the bank’s investment banking and trading divisions.
The bank had about 80,000 employees at the end of last year, according to its latest quarterly report.
The bank’s fourth-quarter profit took a hit as net income for the three months ended Dec. 31 fell to $1.5 billion.
The previous year, Morgan Stanley reported net income of $2.2 billion.
The bank’s fourth-quarter results were marred by $535 million in charges.
The government set aside $286 million to replenish the government’s deposit insurance fund, which was depleted after the collapse of two regional financial institutions last year.
It also cost $249 million in legal fees to resolve the government investigation.
Morgan Stanley agreed last week to pay that amount to end a years-long investigation into its handling of large stock trades by clients.
with post wire
