Bank Morgan Stanley to cut 1,600 jobs

Bank Morgan Stanley is cutting about 1,600 jobs or roughly 2% of its global workforce, joining other big banks in making reductions as the economy slows.

The news comes after chief executive James Gorman warned that the bank would see “modest” job losses.

He cast the downsizing as a predictable outcome after several years of rapid growth.

Goldman Sachs bank is among the others making cuts in the sector, which is also bracing for smaller pay bonuses.

Payouts on Wall Street are expected to fall more than 20% this year, after hitting a record in 2021, said New York city government officials in October. The average award in 2021 was more than $250,000 (£205,000).

Banking is among the sectors most vulnerable to slowing down as central banks around the world make borrowing more expensive by raising interest rates, in a bid to reduce demand for loans, and ease the pressures pushing up prices.

At a banking industry conference on Tuesday, Goldman Sachs boss David Solomon warned about the economic outlook.

“Economic growth is slowing,” he said. “When I talk to our clients, they sound extremely cautious.”

The US economy has so far fared better than expected as consumers continue spending, buoyed by a strong jobs market and savings leftover from the pandemic.

But rapidly rising prices are eroding business and households savings, which could eventually “derail” the economy, Jamie Dimon, head of JP Morgan Chase, told broadcaster  on Tuesday.

Credit Suisse in recent weeks said it planned to shed 9,000 posts over three years, part of a wider restructuring, while Barclays and Citigroup are among the other banks said to be making reductions.

Morgan Stanley, which has made a number of acquisitions in recent years, employed roughly 82,000 people globally at the end of September, up from 75,000 a year earlier.