Bloomberg is reporting 1600
None of this should come as a surprise. Morgan Stanley's CEO James Gorman has always made it clear that Wall Street had to downsize and that he wasn't afraid to have his own employees feel the pain.
That goes for compensation (down 9% since last year) and
This falls in line with some dark predictions about what would happen all over the Street that we've been tracking for some time. When Detusche Bank announced 1900 layoffs this summer, Meredith Whitney swooped in and said it was just the beginning.
She predicted 50,000 job cuts and lower compensation across the board even though the financial meltdown was, at that point, 4 years in the past.
In the long run this is a good thing for the Street, according to Whitney. Banks simply aren't making enough cash to support the staffs they used to have, and shareholders aren't going to stand for banks that "over capitalized and sluggish."
That's what's causing the voluntary downsizing you see here (from Whitney, this summer):
"You can make great money in a utility type of business by borrowing cheaply and lending sensibly but that's not what's being done. The basic bank model has, is, and will be attractive. It's just you're combining everything and undercutting pricing in one place and trying to make up for it, effectively having loss leading businesses... it's not a business that works."
Strong words — and then she really dug in.
"You're either making money or you're not. If you're not making money get out of the business."
When Detusche Bank made its announcement this summer, the company's stock jumped. Morgan Stanley's is creeping up as well.
The news from Gasparino's Twitter feed:
