Morgan Stanley Offers Bonuses … and Pink Slips

The cuts will not impact year end performance-based bonuses, even for potential job-losers or financial advisors within Morgan Stanley Smith Barney, a spokesman said. the cuts will be spread across the investment bank globally and will impact all job levels, said Morgan Stanley spokesperson mark Lake. the announcement comes as a wave of U.S. and European investment banks trim headcount to respond to regulatory changes, new capital requirements and an uncertain earnings outlook. “As we conduct our year-end performance management process and evaluate the right size of the franchise for 2012, we anticipate the elimination of approximately 1,600 positions across the firm globally impacting all job levels,” said Lake in an emailed statement. on news of the layoff plan, Morgan Stanley shares rose 2.6% to $15.58 in early trading before falling back to near-flat levels. the company’s shares have fallen over 44% year-to-date on a deteriorating earnings outlook and worries of an escalating European debt crisis. Earlier in December, Citigroup(C) announced it would cut 4,500 jobs over the next few quarters and take a $400 million restructuring charge. Earlier in the year, Bank of America(BAC) said it would reduce its workforce by 30,000 over the next few years. new York State comptroller, Thomas P. DiNapoli recently estimated that up to 10,000 securities industry employees in new York City could see their jobs cut by the end of next year. Thursday’s layoff announcement follows an announcement earlier in the year that Morgan Stanley would cut 300 low-performing brokers at its Smith Barney unit. in a third quarter earnings call with analysts, Morgan Stanley Chief Executive James P. Gorman told analysts that the company would pay “those employees who are delivering value.” According to a spokesperson, Thursday’s plan doesn’t change Morgan Stanley’s commitment to maintain performance bonuses, even if layoffs occur within strong performing but capital intensive businesses.

Morgan Stanley Offers Bonuses … and Pink Slips


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