Morgan Stanley fires 1,000 retail brokers

Bloomberg News
July 29, 2005

Morgan Stanley, the world's biggest securities firm, is cutting about 1,000 retail brokers to boost profitability in a business that trails Merrill Lynch and Citigroup.

The job cuts, outlined yesterday in a memo to employees from acting president Zoe Cruz, are the New York-based firm's biggest step to reverse a profit slide since John Mack took over as chief exec June 30.

The brokerage unit's pre-tax profit fell 11% in the second quarter and was a focus for critics of former CEO Phil Purcell.

The cutbacks are among the biggest at the biggest securities firms since Merrill CEO Stanley O'Neal began slashing more than 20,000 jobs in 2001.

"We must constantly review the performance of individuals in the retail group and identify those who are not up to our standards," Cruz, 50, said in the memo, which was obtained by Bloomberg News. "As we move towards our new goals, we anticipate reducing the number of brokers by about 10%."

Labels: John Mack, Morgan Stanley