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Morgan Stanley (MS) Seeks Job Cuts in Its Wealth Management Unit
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Morgan Stanley (MS - Free Report) has planned to lay off hundreds of workers from its wealth management (WM) division, a move that is expected to impact less than 1% of the unit’s employees. The news was first reported by the Wall Street Journal, citing a person with knowledge of the matter.
The move comes as the investment banking giant, like several other Wall Street firms, seeks to reduce costs amid economic uncertainty and concerns regarding the trajectory of interest rate cuts by the Federal Reserve.
Morgan Stanley has been focusing more on its WM segment and less on the institutional securities segment (constituting trading and investment banking) over the past few years. This is because the WM segment is less dependent on the capital markets and is a less volatile source of revenues.
The WM segment became an important profit-making unit for MS post the acquisitions of Eaton Vance and E*Trade Financial, under former CEO James Gorman.
However, last year, the segment’s revenues were flat year over year.
The job cuts will be one of the first major moves by Morgan Stanley’s newly appointed CEO Ted Pick.
Pick has reiterated the company’s target of reaching $10 trillion in assets under management.
Over the past six months, shares of MS have lost 2.5% against the industry’s 7.1% growth.
A few days ago, CNBC reported that Citigroup (C - Free Report) is planning to reduce approximately 51 job roles across its wealth segment in London. The move will likely affect 10% of its wealth segment workforce, comprising 485 employees.
The majority of the job roles being eliminated would range from the post of assistant vice president to the director level. The elimination is likely to involve 21 job roles in C’s private bank division.
The decision to eliminate job positions in the wealth segment comes as Citigroup aims to boost the unit’s returns after discouraging results witnessed in the last reported quarter. In the fourth quarter of 2023, the segment’s efficiency ratio rose to 99% from 92% recorded in the year-ago quarter.
A chief operating officer of Citigroup stated, “The wealth business is continuing to identify areas to improve efficiency through structural changes and cost base reductions.”
Last month, it came to light that BlackRock (BLK - Free Report) has been planning to eliminate 600 jobs, accounting for 3% of the company’s total global workforce. The move is part of BLK’s efforts to streamline operations and adapt to a rapidly changing operating environment.
Despite the elimination, BlackRock remains positive about its growth prospects. By the end of 2024, the company expects to employ more workforce, as it plans to expand certain parts of its business.
In a memo to its staff, BLK’s CEO Larry Fink and president Rob Kapito wrote “We see our industry changing faster than at any time since the founding of BlackRock. And, perhaps most profound, new technologies are poised to transform our industry – and every other industry.”
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Morgan Stanley (MS) Seeks Job Cuts in Its Wealth Management Unit
Morgan Stanley (MS - Free Report) has planned to lay off hundreds of workers from its wealth management (WM) division, a move that is expected to impact less than 1% of the unit’s employees. The news was first reported by the Wall Street Journal, citing a person with knowledge of the matter.
The move comes as the investment banking giant, like several other Wall Street firms, seeks to reduce costs amid economic uncertainty and concerns regarding the trajectory of interest rate cuts by the Federal Reserve.
Morgan Stanley has been focusing more on its WM segment and less on the institutional securities segment (constituting trading and investment banking) over the past few years. This is because the WM segment is less dependent on the capital markets and is a less volatile source of revenues.
The WM segment became an important profit-making unit for MS post the acquisitions of Eaton Vance and E*Trade Financial, under former CEO James Gorman.
However, last year, the segment’s revenues were flat year over year.
The job cuts will be one of the first major moves by Morgan Stanley’s newly appointed CEO Ted Pick.
Pick has reiterated the company’s target of reaching $10 trillion in assets under management.
Over the past six months, shares of MS have lost 2.5% against the industry’s 7.1% growth.
Image Source: Zacks Investment Research
Currently, MS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Job Cuts by Other Finance Firms
A few days ago, CNBC reported that Citigroup (C - Free Report) is planning to reduce approximately 51 job roles across its wealth segment in London. The move will likely affect 10% of its wealth segment workforce, comprising 485 employees.
The majority of the job roles being eliminated would range from the post of assistant vice president to the director level. The elimination is likely to involve 21 job roles in C’s private bank division.
The decision to eliminate job positions in the wealth segment comes as Citigroup aims to boost the unit’s returns after discouraging results witnessed in the last reported quarter. In the fourth quarter of 2023, the segment’s efficiency ratio rose to 99% from 92% recorded in the year-ago quarter.
A chief operating officer of Citigroup stated, “The wealth business is continuing to identify areas to improve efficiency through structural changes and cost base reductions.”
Last month, it came to light that BlackRock (BLK - Free Report) has been planning to eliminate 600 jobs, accounting for 3% of the company’s total global workforce. The move is part of BLK’s efforts to streamline operations and adapt to a rapidly changing operating environment.
Despite the elimination, BlackRock remains positive about its growth prospects. By the end of 2024, the company expects to employ more workforce, as it plans to expand certain parts of its business.
In a memo to its staff, BLK’s CEO Larry Fink and president Rob Kapito wrote “We see our industry changing faster than at any time since the founding of BlackRock. And, perhaps most profound, new technologies are poised to transform our industry – and every other industry.”