Morgan Stanley has revealed it will cut 600 jobs as it restructures its mortgage business following lower loan origination levels. US staff will be hit hardest with 500 redundancies, while Europe will see 100 cuts, including 90 in Advantage, Morgan Stanley’s UK subsidiary.
The consolidation of multiple brands, as seen at Lehman Brothers, is also reflected by Morgan Stanley, which plans to merge three of its US mortgage businesses into one.
Citigroup and UBS have also recorded major losses. Citigroup predicted its Q3 business volumes would be down 60 per cent on the same period last year, while UBS faced losses of up to £335 million in Q3. UBS is also cutting 1,500 jobs alongside a management shake up.
However, Citigroup’s chief executive, Charles Prince, remained confident, and stated: “We see this quarter’s overall poor trading performance as an aberration. While we cannot predict market conditions or other unforeseeable events that may affect our businesses, we expect to return to a normal earnings environment in Q4.”
James Cotton, mortgage specialist for London & Country, said: “When looking at the big investment banks, their recruitment policy is very cyclical. In times when things are quieter or there is a slowdown, they have to cut their head count considerably. No one has escaped without some sort of loss and we’re going to get all major banks reporting write downs.”
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