Morgan Stanley announced that it’s downsizing about 1,500 employees, primarily in New York and London.
The company said that the cuts are due to concerns about the future of the global economy and not any internal issues. Employees in technology, operations, sales, trading and research are said to be targeted. Some managing directors will be impacted as well. The job cuts come at a time when bankers, brokers and traders were expecting their bonuses, promotions and raises.
In a so-called “hot” job market, downsizing has become a regular occurrence at banks. Banking and financial institutions are confronted with a toxic combination of falling interest rates, uncertainty over Brexit, tensions between China and the United States, Hong Kong protests, the ramifications of trade wars and the possibility of a recession and an accompanying downturn in the global stock markets.
The decision to scale back was made when the bank saw its stock price surge 25% higher this year and reported strong earnings and corporate growth. James Gorman, the CEO of Morgan Stanley, warned investors and analysts that the possible impact of “trade and political uncertainty, economic growth concerns and central bank responses.” According to the Financial Times, sources said, “It’s robust cost management. We’re not making a big call that the environment is going to be much worse next year . . .[but] we’re cautious that it might not be better.”