Morgan Stanley announces 1,600 job cuts

Morgan Stanley joined other Wall Street financial giants in cutting costs by announcing plans to eliminate 1,600 jobs as the European and the US economic turmoil continues to hit even the most profitable financial institutions.

Morgan Stanley will cut 1,600 jobs worldwide across all job levels in the first quarter or 2.6 per cent of its 62,648 strong workforce.

"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," Jeanmarie McFadden, a Morgan Stanley spokeswoman, said in a statement.

The job cuts announced yesterday represent the largest since the New York-based financial services firm laid off more than 2,500 employees during the global financial crisis of 2008-2009.

Although Morgan Stanley did quantify the savings it expects from the job cuts, it would help reduce the bonuses paid to employees, which account for a large part of their compensation package.

The cuts will not affect the firm's 17,000 financial advisors but some positions would be affected in its wealth management division, which has contributed over $10 billion to Morgan Stanley's overall revenue of $26.8 billion.