Morgan Stanley Plans 3,000 More Job Cuts
The firmwide results also saw Morgan Stanley’s efficiency ratio — a measure of non-interest expense relative to revenue — hit 72%. The bank has spelled out a target of keeping that figure below the 70% mark.
Industry Cuts
Job cuts across finance have returned since the pandemic, when banks held off on reductions to give employees stability and then fought for talent as deals picked up. But as that frenzy cooled, expenses have become the focus with several banks unveiling plans to fire staff.
Morgan Stanley in December cut roughly 1,600 jobs, which led to $133 million of severance costs in the fourth quarter tied to the reduction. Then Goldman Sachs Group Inc. eliminated about 3,200 positions in January in one of its biggest cuts ever.
On Monday, Citigroup Inc. Chief Executive Officer Jane Fraser said her company is willing to make adjustments to staffing levels at its investment bank.
“Like every institution, you make some adjustments around the capacity, but we’re playing the long game in investment banking,” Fraser said in a Bloomberg Television interview.
Ken Jacobs, who runs Lazard Ltd., forecast that the industry’s doldrums will last for the rest of the year.
Lazard will eliminate 10% of its workforce, the New York-based firm said last week. Jacobs noted that dealmaker pay has surged in recent years as junior bankers demanded higher salaries amid a boom.
It’s harder to roll back those raises, while costs for travel, entertainment and information services have soared as well, Jacobs said in an interview last week.
(Image: Bloomberg)
Copyright 2023 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
