Morgan Stanley is preparing to wield the axe over its brokerage business, with plans to close down 300 branch offices and cut as many as 1,200 jobs in order to bring down costs related to the integration of the Smith Barneyunit it bought from Citigroup last year, Fox Business reported.
Morgan Stanley is seeking to save as much as $1.1 billion through the merger of Smith Barney with its own brokerage unit and has already slashed 200 jobs — mostly support staff — to eke out savings, Fox Business said.
Morgan’s deal to buy Smith Barney from Citigroup, announced in early 2009, came as the bank sought ways to make up for reduced trading activity in the wake of the financial crisis, Fox Business noted.
However, the report continued:
Since then, there has been a significant slowdown in small investors turning to brokers to execute orders; many investors are sitting on cash because they are fearful of the recent volatility in the markets. Because of the declining retail order flow, every major brokerage firm will have to cut staff, Morgan even more so because of the overlap from the Smith Barney acquisition.
Now, voices are being raised at Smith Barney that their side faces harder cuts than the Morgan Stanley side, Fox said, and it is not only the companies’ “so-called support staff” that may be in danger of losing their jobs.
Both companies also employ research analysts to write reports for retail customers; these positions, too, are endangered by the cutbacks, Fox said, citing people close to the matter.