) is considering possible job cuts in its retail brokerage segment
in order to improve profitability. It is also planning to shutter
its redundant brokerage offices as a part of this strategy.
Morgan Stanley Smith Barney - a retail venture co-owned by
) and Morgan Stanley - faces a major revamp. More than a dozen of
the 120 complexes of this brokerage firm are about to be
eliminated. A complex refers to a set of branches that share
personnel from administrative and other operations.
Further, Morgan Stanley reduced four operating regions of the
venture. The exact number of job cuts has not been announced yet.
However, around 700 employees across 100 offices are expected to be
In order to achieve targeted pre-tax profit margin, the company
is focusing on controlling its expenses. These actions act as a
prelude to the upcoming abundant restructuring initiatives at
Earlier in 2011, Morgan Stanley announced its plan to retrench
1,600 workers in the first quarter of 2012.The job elimination took
place in all divisions globally and affected employees at all
levels. However, at that time the 17,000 financial advisers of the
Morgan Stanley Smith Barney unit were not in the danger zone.
Morgan Stanley was one of the major victims of the 2007 housing
bubble. Its share price has plummeted largely since then. Despite
taking several precautionary initiatives, the company is still
unable to come out of the crisis. All these restructuring efforts
underline its constant struggle to regain pre-crisis glory.
Notably, Morgan Stanley is not the only institution to trim down
its workforce. Citigroup,
Bank of America Corp.
Goldman Sachs Group Inc.
) have been taking similar actions.
Dismal economic scenario and a desperate attempt to display
better revenue generation will force banks to take cost-control
measures very seriously. These measures will give rise to closures
of non-core units and layoffs, ultimately resulting in higher
Morgan Stanley currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. Considering the
fundamentals, we also maintain a long-term Neutral recommendation
on the stock.
BANK OF AMER CP (BAC): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis Report
MORGAN STANLEY (MS): Free Stock Analysis Report
To read this article on Zacks.com click here.