Joining a Wall Street stampede, Morgan Stanley Dean Witter & Co. on Tuesday announced the deepest job cuts in its history.
The company said it would lay off 1,500 in its securities and investment management units, or 4% of the work force in those areas.
The plan was first announced internally Tuesday morning, and some of those earmarked were told so during the day. Most of those losing their jobs are U.S. employees, but the Canadian bond trading desk was also reportedly closed. Morgan Stanley employs 60,500 people worldwide.
Though the layoffs span the "entire possible universe" of Morgan Stanley's securities and investment management divisions, a spokesman said, the company is leaving its 14,000-person broker sales force untouched.
Earlier this month Morgan Stanley executives vehemently denied reports that they were planning to fire up to 1,000 brokers, and said they actually intended to add 2,500 this year. That is still the plan, the spokesman said Tuesday.
"We believe our competitive advantage in serving individual clients is the value of our financial advice, and we actually plan to grow our financial advisers," the spokesman said.
Diana Yates, an equity analyst with A.G. Edwards & Sons in St. Louis, said that Morgan Stanley told analysts that its Discover Card unit, as well as its brokers, would be unaffected by layoffs.
A host of financial services companies - from retail brokerages to fund companies to investment banks - have announced layoffs. In March, Charles Schwab & Co. announced plans to lay off 13% of its work force, and Merrill Lynch & Co. recently said it had eliminated 1,700 employees this quarter, mostly through attrition.
A.G. Edwards' Ms. Yates said that Wall Street can probably expect more bloodshed soon. "If the market doesn't come back there's a another level they're going to have go to," she said. "Nobody is really focused on how ugly second-quarter earnings are going to be. There's been no merger and acquisitions business, no IPOs out there - it's Deadsville."
And Morgan Stanley is among the companies with only May left in their fiscal second quarter, Ms. Yates added.
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