Morgan Stanley will cut 1,600 employees in the first quarter, the bank said on Thursday, as it trims costs in a difficult period for trading and banking revenue.
The job cuts will come across all staff levels and geographic areas, spokesman Mark Lake said, including investment banking, trading and back-office functions.
Morgan Stanley is one of the last big Wall Street banks to announce major job cuts as analysts have begun slashing fourth-quarter earnings estimates.
Other banks, including Goldman Sachs Group Inc, JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc have already outlined plans to cut thousands of jobs this year. Morgan Stanley had kept firings limited to several hundred underperforming financial advisers earlier in 2011, but is now extending the cuts to banking and trading.
The cuts represent less than 2 percent of Morgan Stanley's workforce at Sept. 30 and come as the European debt crisis continues to add stress to the markets.
Trading and dealmaking volumes have been hurt by volatile markets. At the same time, the value of securities banks hold for investments, clients or market-making purposes have declined, further hitting revenue and earnings.
Morgan Stanley is likely to report a loss in the fourth quarter, according to analyst reports this week, due to a special $1.2 billion charge the bank announced this week, related to a settlement with the bond insurer MBIA Inc.
Even excluding that charge, Morgan Stanley will earn just 15 cents per share for the fourth quarter, Atlantic Equities analyst Richard Staite predicted in a report on Thursday. That compares with 41 cents per share in the year-ago period.