A well-placed source close to the firm tells us that Morgan Stanley will have to fire 20% of the managing directors in research by the end of the year.
Morgan Stanley names around 210 – 240 new managing directors per year, and in 2006, a research paper by the University of Chicago Booth School of Business estimated that Morgan Stanley employed around 780 managing directors, only 10-15% of which are probably in research, to give you a rough idea of how many managing directors will lay off this year.
We’ve emailed Morgan Stanley PR and have not heard back yet.
Firing the bottom 5% or 10% of performers in the second half of the year is not unusual at Wall Street firms, and this year, banks especially have been cutting their work force more aggressively in what they call “RIFs” or “reductions in workforce.”
So this isn’t shocking — the layoff carnage that’s about to hit Wall Street is well documented — but we’re now starting to see more specifically where the layoffs will hit.
After Charlie Gasparino said that Morgan Stanley had been running layoff scenarios into the thousands, Ruth Porat, Morgan Stanley’s CFO, suggested the layoffs would hit Morgan’s brokerage and beyond. And Reuters reported that potential job cuts would come “come on top of a reduction of about 300 brokers during the first quarter.”
As the layoffs approach, we’re getting a better picture of what Wall Street layoffs will look like on the Street:
Goldman Sachs expects to fire 1,000 people globally; 230 in New York by year end.
Barclays expects to cut 659.
Credit Suisse will cut 1,000.
Citigroup will shed 100 to 300.
And UBS will lay off 500 in IT and 5,000 globally.