Morgan Stanley Fires 150 in Broker Unit, People Say (Update3)
By David Clarke
London, Aug. 16 (Bloomberg) -- Morgan Stanley has fired 150 employees from its division that handles investments for individuals, people familiar with the situation said.
About 100 worked in the U.S. helping to process trades and provide other support services to brokers and other employees at the second-biggest securities firm by capital. Another 50 offered similar support and bookkeeping services in Europe to private banking brokers who do business with wealthy individuals, the people said.
The cuts come as individual investors have retreated from paying fees and commissions to buy and sell stock amid a worldwide economic slump that has eroded the value of their investment portfolios.
``Most private bank businesses are suffering at the moment,'' said Martin Cross, an analyst at Teather & Greenwood in London. ``The super rich just want capital protection.''
The job losses affected about 5 percent of the 1,000 employees working at Morgan Stanley Private Wealth Management in London, Geneva and Zurich. Most of those fired performed administrative tasks in the unit, which caters to customers who typically invest at least $5 million, the people said.
Other Firms
Several private banks in Switzerland have been cutting as well. Julius Baer Holding AG, Switzerland's largest publicly traded bank for wealthy customers, said today it would continue to cut jobs and may close entire units as its first-half profit fell 14 percent.
Geneva-based Union Bank Privee is trimming a quarter of its workforce. In July, two other Swiss private banks, Lombard Odier & Cie and Darier Hentsche & Cie, merged to cut costs.
Hugh Fraser, a spokesman for Morgan Stanley's wealth management unit, declined to comment on the firings.
Morgan Stanley, the largest securities firm by market value, has cut about 5 percent of its worldwide staff in the past six months. Its 58,538 employees at the end of May compared with 61,319 at the end of November 2001, according to its Web site. Worldwide, the New York-based firm manages about $570 billion for individuals. The firm has 13,700 brokers.
On June 19, Morgan Stanley reported that profit fell 14 percent in the second quarter, the seventh year-over-year quarterly decline, as a slump in stock sales, mergers and energy trading cut net income to $797 million. |
