Morgan Stanley Imposes Hiring Freeze, Which Could Lead to Layoffs
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Price: $222.13 +1.86%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 1.7%
EPS Growth %: +32.9%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 1.7%
EPS Growth %: +32.9%
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According to a report on Monday from FOX Business Network's Charles Gasparino, Morgan Stanley (NYSE: MS) is enforcing a company-wide hiring freeze on its workforce, adding that the bank may see layoffs later this year if it sees weak performance in the fourth quarter.
"The Wall Street profit drought has claimed another victim, with Morgan Stanley placing a company-wide hiring freeze on its workforce and people inside the firm bracing for layoffs later in the year…A Morgan Stanley spokesman confirmed to FOX Business that a hiring freeze is in place," Gasparino said.
The bank had put a freeze on hiring roughly a month ago, when Morgan Stanley saw that it would see substantially lower profits for the third quarter than it had previously anticipated.
"A profit drought has forced every major bank and financial firm to reassess hiring, and bonuses levels, for 2010, with Bank of America emerging as the first firm to institute layoffs. Bank of America (NYSE: BAC) is cutting staff in its capital markets group by as much as 5 percent amid a sharp decline in trading revenue at the big bank."
According to analysts that have met with the firm cited by FOX Business the bank has not yet decided to conduct layoffs, but said that the firm’s chief executive officer James Gorman is watching Morgan Stanley’s performance during the final three months of this year.
"A lot depends on the fourth quarter," said one senior Wall Street told Gasparino. "If it looks anything like the third quarter, everyone will be cutting."
Gasparino sees Morgan Stanley’s business model possibly producing smaller profit margins than rival Goldman Sachs Group Inc. (NYSE: GS). Analysts see Goldman making $7 billion this year compared with $12 billion last year, impacted by lower trading volumes.
Shares of Morgan Stanley are down 27 cents to $24.88 in late market movement on Monday.
"The Wall Street profit drought has claimed another victim, with Morgan Stanley placing a company-wide hiring freeze on its workforce and people inside the firm bracing for layoffs later in the year…A Morgan Stanley spokesman confirmed to FOX Business that a hiring freeze is in place," Gasparino said.
The bank had put a freeze on hiring roughly a month ago, when Morgan Stanley saw that it would see substantially lower profits for the third quarter than it had previously anticipated.
"A profit drought has forced every major bank and financial firm to reassess hiring, and bonuses levels, for 2010, with Bank of America emerging as the first firm to institute layoffs. Bank of America (NYSE: BAC) is cutting staff in its capital markets group by as much as 5 percent amid a sharp decline in trading revenue at the big bank."
According to analysts that have met with the firm cited by FOX Business the bank has not yet decided to conduct layoffs, but said that the firm’s chief executive officer James Gorman is watching Morgan Stanley’s performance during the final three months of this year.
"A lot depends on the fourth quarter," said one senior Wall Street told Gasparino. "If it looks anything like the third quarter, everyone will be cutting."
Gasparino sees Morgan Stanley’s business model possibly producing smaller profit margins than rival Goldman Sachs Group Inc. (NYSE: GS). Analysts see Goldman making $7 billion this year compared with $12 billion last year, impacted by lower trading volumes.
Shares of Morgan Stanley are down 27 cents to $24.88 in late market movement on Monday.
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