Morgan Stanley To Cull 25% Of Fixed Income Jobs Within 2 Weeks As Revenues Plunge

Tyler Durden's picture

Stiffer capital rules, a slump in client transactions and a shift toward electronic trading have crimped margins in key fixed-income markets, pushing banks to pull back and eliminate staff... and amid a 42% collapse in fixed-income revenue in Q3, Morgan Stanley is taking action:

  • *MORGAN STANLEY SAID TO PLAN FIXED-INCOME JOB CUTS OF UP TO 25%

The cuts are said to be worldwide and will happen with two weeks (just in time to watch the carnage unleashed by The Fed).

 

As Bloomberg reports,

Morgan Stanley, the investment bank that saw bond-trading revenue plunge 42 percent in the third quarter, is planning a significant reduction in its fixed-income staff, according to people with knowledge of the plans.

 

The cuts, which could total as much as a quarter of fixed-income trading employees, will be across all regions and are set to take place in the next two weeks, said two of the people, who asked not to be identified because the decision hasn’t been publicly announced. Hugh Fraser, a spokesman for the New York-based bank, declined to comment.

 

“The trick for us is to size our business appropriately to what we think the fee pool is,” he said at the conference. While trying to gauge that, the investment bank needs to keep the unit “credibly sized” to complete globally, and “make sure we have enough flex or leverage that when the markets recover, which we do think they’ll recover, you’ll be able to participate in the upside of that,” he said.

*  *  *

So - the future does not look bright then?

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SILVERGEDDON's picture

Start at the top of the heap, and actually accomplish something positive for the company, assholes.

Take out the top 25 percent of salaried overlords, save monster amounts of pissed away admin dollars, and let the troops do the job at an increase of at least a 400% improvement in productivity.

Come to think of it, if you did that world wide in industry and government, we would enjoy a rebirth of prosperity and productivity that would know no equal in recorded history.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) SILVERGEDDON Nov 30, 2015 1:08 PM

The good news is that there is still a high demand for bartenders, waiters, waitresses and McDonald's burger flippers (for now, anyway).

rapetrain's picture

They usually cut the VPs and Directors... other associates can do the jobs of VPs for a fraction of the cost... same with VPs doing the jobs of directors

Government needs you to pay taxes's picture

Just in time for Christmas!  Merry X-mas banksters.

Evan Wilson's picture

What about the old protocol where a company was expected to NOT do any layoffs during the holday season, Thanksgiving to New Years Day?

 

 

junction's picture

"Merry Christmas and you are fired!"

Kprime's picture

happy new year in your new job

Grandad Grumps's picture

Maybe cutting salaries would be better than cutting jobs.

KnuckleDragger-X's picture

I see big bonuses in their future due to such forward thinking......

Government needs you to pay taxes's picture

On Wall Street, it's kill or be killed.  If you have to fire 3 underlings to get your $2MM bonus, it could be worse.  It might have been 3 underlings under tha bus.

Sudden Debt's picture

In 2009 I used to work for a big international company and we had to cut costs drasticly.

And we proposed to the people to cut the variable wages (about 20% of the salary) and then there wouldn't be anybody fired.

You know what?

We had a small revolt, unions didn't want to hear about at all!!

So... we had to cut people, a lot of people.

And did you know what almost everybody who got fired said? "Can't I just give up on the variable part and keep my job??"

Nop... it had to be a team effort. And when you tought somebody else would get fired you didn't want to hear about it.

There's no team spirit in the world.

Just look at those drone pilots! If they get a paycheck, they don't really care if they need to kill children. Sadly, a lot of people are like that.

Dubaibanker's picture

As I have been anticipating for the last few months that Nov and Dec will be shocking months as far as massive job cuts in most sectors will be and especially in banking.

But some news coming is even beyond my expectations.

1.

HSBC Said to Close Down Private Banking Operations in India

 

http://www.bloomberg.com/news/articles/2015-11-27/hsbc-said-to-close-down-private-banking-operations-in-india?

2.
Barclays is looking to sell it's entire Asia Private banking business and shut down across Asia. It is expected that DBS may buy them.

 

Barclays Said to Gauge Interest in Asia Wealth Business Sale http://www.bloomberg.com/news/articles/2015-11-06/barclays-said-to-gauge-interest-for-asia-wealth-management-sale

3.
Earlier in Nov, Deutsche announced 1,000 job cuts just in London. Overall, Deutsche has announced 35,000 job cuts and closure in 10 countries worldwide.
Deutsche Bank Said Planning 1,000 London Job Cuts: Sunday Times http://www.bloomberg.com/news/articles/2015-11-22/deutsche-bank-said-planning-1-000-london-job-cuts-sunday-times

4.
Last month, Credit Suisse announced 5,000 job cuts.
New Credit Suisse CEO announces 5,000 job cuts http://www.thelocal.ch/20151021/credit-suisse-announces-5000-job-cuts

5.
3 days ago, HSBC announced 1,000 job cuts worldwide.
HSBC Said to Start 2,000 Job Cuts in Commercial Banking Unit http://www.bloomberg.com/news/articles/2015-11-23/hsbc-said-to-plan-cutting-2-000-jobs-in-commercial-bank-division

6.
2 days ago, the CEO of the largest investment bank in Brazil which was founded only a few years ago and was one of the most flourishing bank in Brazil was arrested.
Head of Brazil’s Largest Investment Bank and a Senator Arrested in Petrobras Probe

http://www.wsj.com/articles/brazil-police-arrest-ceo-of-brazilian-bank-btg-pactual-in-corruption-probe-1448457954

7.
2 days ago, Lloyds Bank also announced 1,000 job cuts
Lloyds announces 1,000 job cut details

http://www.express.co.uk/finance/city/622299/Lloyds-announces-1000-job-cut-details

8.
Earlier in Nov 2015, Standard Chartered announced they need a massive capital raise and that they will fire 15,000 employees.
Standard Chartered Bank to Raise $5.1 Billion and Cut 15,000 Jobs

http://www.nytimes.com/2015/11/04/business/dealbook/standard-chartered-bank-job-cuts-capital.html

9.
Spanish bank BBVA will close 26 branches in Portugal and cut 187 jobs in Portugal.

 

  Spanish bank to close 26 branches, cut 187 jobs in Portugal

 

http://news.xinhuanet.com/english/2015-11/13/c_134811832.htm

10. 
Two Israeli banks have decided to close Luxembourg and Swiss operations.
Israel Discount Bank sells Swiss operations

http://www.globes.co.il/en/article-israel-discount-bank-sells-swiss-operations-1001083388

11.
Standard Chartered is closing Oman.
STANCHART OMAN MAY CLOSE RETAIL BANKING OPERATIONS http://www.muscatdaily.com/Archive/Business/StanChart-Oman-may-close-retail-banking-operations-4eps

This does not include the information that I am privy to for job cuts in the UAE which amounted to almost 3,000 just this month! At least one major bank is shutting down operations in DIFC, while 2-3 banks have shuttered their SME divisions.....several Heads of SME, several Heads of Credit have been laid off including at least one CEO of a bank in UAE.

Meanwhile, for those who think that India will compete with Silicon Valley or that India offers a new IT opportunity, please read this carefully. India simply does not have the eco system or the demand for what it takes to be an IT hub. That has been my view and remains so. Billions of dollars are going to be lost in IT endeavours in India!
The pricking of India's ecommerce bubble

http://www.zdnet.com/article/the-pricking-of-indias-ecommerce-bubble/

 

Son of Loki's picture

So, in other words, the Rekovery is very Robust?

two hoots's picture

 

“Net issuance of U.S. notes and bonds will tumble 27 percent next year, according to estimates by primary dealers that are obligated to bid at Treasury debt auctions. The $418 billion of new supply would be the least since 2008.”  Bloomberg

 

http://www.bloomberg.com/news/articles/2015-11-30/there-s-a-big-drop-in-...

  

Open_outcry's picture

Great post, thanks! However, job creation/destruction is not a leading indicator. Money flows are. I don't think enough attention has been placed on the PE and VC business cycles. IPO volume is lowest since 2009 (if they can't get out, they can't recycle investment dollars and raise less new money).

https://www.ipomonitor.com/pages/ipo-deal-flow.html

Amount of VC money raised in Q3 '15 slowed dramatically: http://www.cnbc.com/2015/10/07/the-vc-slowdown-is-here-report.html

I consulted to VC backed companies in Sili Valley/SF for last few years. Many business models were based on generating growth through FB and GOOG spending. Could they grow revenues? Definitely, that's why they do it! Are they viable businesses? Hardly. As the source of new money dries up, so will GOOG & FB revenues. As those high flyers drop, so will AMZN, NFLX, et al. As the momentum plays fade away, so will the market...

Dubaibanker's picture

thanks fo ryour comment. Appreciate it.

However, I never alluded that job destruction is a leading indicator.

I believe that job destruction since 2008 is the cause for demand destruction which is why steel companies, car factories, oil companies, retail stores, now even food stores, restaurants etc i.e. literally everything is spiralling down in a destructive downward spiral.

We can also place the blame of terrorism to an extent on joblessness and lack of growth.

Money flows are very critical and are a flow indicator and are caused after jobs are cut which leads to further #demanddestrucion and consequently even lower money flows.

Google and FB are also banned in China, Iran and several other nations while new players are arising like Baidu who eat revenues of US giants. Growth in G7 countries is very weak and on its last legs.

No one knows what will happen in the next decade at the speed at which we have cut jobs while population keeps rising.

Things are bound to get out of control and money flows will keep declining and deglobalization will keep growing until large players get cut down to size and actual Govt's start to default due to lack of buyers, lack of pensions, lack of civic faciltiies.....

aliki's picture

ZIRP claiming yet more victims (with more to come)

but hey, according to steve lies-man, nothing can go wrong, ever, forever with ZIRP (and just you wait until NIRP, really be cooking with gas then)

CNBC currently still trying to figure out where the "gas saving $$$" has gone

Normalcy Bias's picture

Finally, some happy job loss news!

_ConanTheLibertarian_'s picture

 42% collapse in fixed-income revenue in Q3

Now THAT is a plunge Zero Hedge. Comprende?

Conax's picture

Murry Christmas!

er- Happy Channukah!

It's always best to burn employees in the middle of December, I know I enjoyed it.

pelican's picture

Just before bonus time.  Don't forget no seperation pay!  Merry fuck you

Soul Glow's picture

This is bullish somehow I just know it.

Son of Loki's picture

Good for another 5% up on the Dow!

Kprime's picture

it's giving me a woodie

chunga's picture
Irish Nuns Sue Morgan Stanley over Bond Deal

http://www.cnbc.com/id/38672575

A group of nuns from Ireland are suing Morgan Stanley, alleging improper actions by the investment bank that led them to lose at least 5 million euros ($6.4 million), about 80 percent of their total investment, a filing by Stuarts Law showed.

Government needs you to pay taxes's picture

Morgan Stanley didnt want those nuns to go all the way through life having never been fucked!

pitz's picture

That'll teach those nuns that they should've taken up fundamental Islam (where bond investing is strictly prohibited) instead.  But wait, don't the Saudis heavily invest in US government debt? 

Expat's picture

Wow, merry fucking Christmas to all my former buds in commodity trading. 

but frankly, wake me up when someone announces that the top 25% of all banks are not getting fired, but getting fired AT!

kliguy38's picture

seems like a waste of perfectly good ammunition

LawsofPhysics's picture

Yes,the guillotine is more appropriate.

herkomilchen's picture

That's wasteful.  I want some of my money back.  Extracted from their hides.

Enslave them for life.  Generating as much money as possible to partially restitute their victims.  For example all those who died in recent decades for lack of medical care rendered unaffordable because these people employed government violence to steal their earnings.

If their most revenue-generating use turns out to be grappling lions in a coliseum for cheering crowds, serving as anal sex slaves, or contributing body organs for transplants, then so much the better.

jakesdad's picture

^- fed is proactively (coordinating?) propping up markets (not just reactively ppt) so then CAN liftoff

v- this is actually legit organic demand

hotrod's picture

NO PROBLEM.  USA is at FULL EMPLOYMENT.  Opportunities abound at 5% unemployment.

Bam_Man's picture

Yup. They fire you right before the end of the year so you receive no bonus. And wish you a Merry Christmas on your way out the door.

Such is life in the den of thieves and vipers that is Wall Street.

Expat's picture

BAM, they can't take away your bonus.  If they are axing so many before Christmas, it's to get the employees fired in 2015 and take all the charges before 2016.  Your bonus is a done deal by now.

pitz's picture

Of course they can take away the bonus.  Bonuses are entirely at the discretion of the employer unless its written into their employment contracts. 

Government needs you to pay taxes's picture

If MS wants to play rough, they'll stiff everyone on the bonus and then play legal defense as necessary.  Just like healthcare insurers and their 'litigate payment' strategies, this is frequently the cheapest way to go.  For those fucked this way, by all means, go Postal.  

venturen's picture

but you get a free box to carry your desk items 

Bam_Man's picture

At the den of vipers and thieves where I used to work, bonuses were not paid out until mid-January for this very reason.

They accrue for the bonus all year, and then don't give it to you becasue you've been fired. It goes straight to the bottom line, helping them "make" their year-end numbers.

Very rarely (and then only in the case of very senior executives) is a bonus payout stipulated in an employment contract, although terms of severance most certainly would be.

Government needs you to pay taxes's picture

Agree, but the risk of litigation/arbitration increases with the ascending seniority of the fired involved (more $$ at stake).

two hoots's picture

Is this the future news?:   "US to eliminate 20,000 seniors" 

 

pitz's picture

The banking sector needs to get used to paying Wal-Mart wages.  Because that's all they'll be able to afford for the next 20-30 years of flat yield curves and rising long-term interest rates.

Duc888's picture

 

 

Why can't we just bail them out?  They've been so good to us.

Fox-Scully's picture

They probably got a cheap source of coal to hand out for Christmas.

ThrowAwayYourTV's picture

So this one computer say's to the other computer, "WoW! Look at all those humans. What are we going to do about them?"

And the other computer says to the first computer, "I dont know! but lets start off by taking all their jobs and controlling their money and maybe most of them will just go away."

F em all but 6's picture

Great News!!! This is just what .gov needed to officially declare the unemployment rate has dropped below 5%.

conraddobler's picture

You're fired but BUT.... here's your 1 year subscription to the jelly of the month club.

Merry Christmas!