Morgan Stanley will cut 1,600 employees in the first quarter, the bank said today, as it trims costs in a difficult period for trading and banking revenue.
The job cuts will come across all staff levels and geographic areas, a spokesman said, including investment banking, trading and back-office functions.
Morgan Stanley is one of the last big Wall Street banks to announce major job cuts as analysts have begun slashing fourth-quarter earnings estimates. Other banks, including Goldman Sachs, JPMorgan Chase & Co, Bank of America and Citigroup have already outlined plans to cut thousands of jobs this year.
Morgan Stanley had kept firings limited to several hundred underperforming financial advisers earlier in 2011, but is now extending the cuts to banking and trading. The cuts represent less than 2% of Morgan Stanley's workforce and come as the European debt crisis continues to add stress to the markets.
Trading and dealmaking volumes have been hurt by volatile markets. At the same time, the value of securities banks hold for investments, clients or market-making purposes have declined, further hitting revenue and earnings.
Morgan Stanley is likely to report a loss in the fourth quarter, according to analysts this week, due to a special $1.2 billion charge the bank announced this week, related to a settlement with the bond insurer MBIA.
