UPDATE: Morgan Stanley Restructuring Mortgage Operations
Last update: 10/2/2007 12:29:08 PM
DOW JONES NEWSWIRES
Morgan Stanley (MS) announced a restructuring of its residential lending business that will result in 600 job cuts because of lower mortgage origination.
Some 500 people will be laid off in the U.S., with Europe seeing about 100 cuts.
Tony Tufareillo, Morgan's global head of securitized products, said the moves will improve services for customers and "best position the firm for growth when opportunities present themselves in the future."
Morgan Stanley has three standalone mortgage businesses in the U.S. They will be consolidated, with the U.S. mortgage operations based in Irving, Texas.
Shares of Morgan Stanley were recently up $1.99, or 3.1%, at $66.
Morgan Stanley's cuts are the latest for an industry that has been walloped by the credit crunch and housing-market slowdown. This past summer, Lehman Brothers Holdings Inc. (LEH) made three different rounds of job cuts and lopped off nearly 2,500 employees.
The retrenchment comes as the Wall Street brokerages - along with numerous other mortgage lenders, underwriters and investors - adjust to the ongoing turmoil in the credit markets, caused by sharp climbs in subprime mortgage delinquencies and foreclosures. That has caused a sharp curtailment in investor demand for mortgages and mortgage-backed securities recently.
Outplacement firm Challenger, Gray & Christmas said last month that through August, there were 48,705 announced job cuts from mortgage and subprime lenders, 30,892 of which were in August alone. In all of 2006, there were 12,874 announced cuts, said Challenger.
- Kevin Kingsbury; Dow Jones Newswires; 201-938-2136; kevin.kingsbury@dowjones.com
(END) Dow Jones Newswires
October 02, 2007 12:29 ET (16:29 GMT) |
