Bloomberg News

Morgan Stanley Weighs Job Cuts as Barclays Reduces Sales Posts

June 08, 2011

June 8 (Bloomberg) -- Morgan Stanley, owner of the world’s largest brokerage, may eliminate more jobs at its wealth management unit as Barclays Capital cuts positions in its equities division worldwide.

“As we continue to take actions to improve broker efficiency we may reduce our broker headcount below previously announced targets,” Morgan Stanley Chief Financial Officer Ruth Porat said at the Deutsche Bank Global Financial Services Conference yesterday. The unit, which had about 17,800 employees at the end of March, was previously aiming to reduce that figure to as little as 17,500, according to a spokesman for the bank. The firm cut 300 brokers at the division in the first quarter.

Barclays Capital, the investment-banking unit of London- based Barclays Plc, cut as many as 50 jobs in its equities division worldwide, a person familiar with the matter said. The reductions affected employees in sales, trading and research, said the person, who requested anonymity because the plan isn’t public. The move, part of a mid-year performance assessment, wasn’t made because of declining revenue, the person said.

Barclays, the U.K.’s third-largest bank by assets, said in April that pretax profit at its investment bank fell 33 percent as revenue from fixed-income, currencies and commodities trading tumbled. Equities-trading revenue at global investment banks, including Barclays Capital, will drop an average of 12 percent in the second quarter, compared with the previous three-month period, according to an estimate yesterday by Kian Abouhossein, a JPMorgan Chase & Co. analyst.

Shrinking Revenue

Net revenue at the six biggest U.S. banks -- Bank of America Corp., JPMorgan, Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley -- fell 13.3 percent in the first quarter from a year earlier, according to data compiled by Bloomberg. Global investment banking revenue may decline by about 16 percent in the second quarter because of a slowdown in fixed-income, currencies and commodities trading, Abouhossein said in a report to clients yesterday.

Morgan Stanley bought a controlling stake in a joint venture with Citigroup’s Smith Barney unit in 2009, giving it a retail brokerage with $1.67 trillion in client assets as of Dec. 31. The bank said in March it will proceed with plans to buy the rest of the joint venture after the Federal Reserve’s review of its capital plan.

Brandon Ashcraft, a spokesman at Barclays Capital in New York, declined to comment. Dealbreaker.com reported the job cuts yesterday.

--Editors: Edward Evans, Stephen Taylor.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.


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