“In the latest retrenchment on Wall Street, Morgan Stanley is laying off at least 275 salesmen, traders, analysts and investment bankers,” writes Susanne Craig in today’s Wall Street Journal.

“The cuts are spread across several areas at the large securities firm. They include 5% of Morgan’s sales-and-trading staff, or 75 people; 11% in research, or 100 people; less than 5% in investment banking, or 50 people; and 50 people in its bond division.”
“This week’s layoffs follow cuts in the New York firm’s brokerage ranks earlier this month, when Morgan laid off 5% of its staff, or about 680 people.”

“Much of Wall Street is reducing staff. But the development at Morgan was surprising to some analysts because the firm had resisted the broad reductions made by many of its rivals. The financial-services firm had 57,799 employees at the end of August, down 7.8% from a peak of 62,679 at the end of 2000.”

” ‘They have been vocal about maintaining staffing levels,’ said Glenn Schorr, an analyst with Deutsche Bank Securities in New York. ‘They believed that if the economy turned they would be in a better position to capitalize on the recovery. But now they have joined the rest of the industry in cutting back. It’s another signal that the world has changed and the recovery won’t be as fast as they had hoped.’ “

“The securities industry has dismissed 32,287 employees, or 8.8% of the combined work force, since the end of 2000, according to the Securities Industry Association, a trade group. But the job cuts appear to be deeper than these numbers suggest, at least at many of the larger firms. For instance, Merrill Lynch & Co., the nation’s largest securities firm, has reduced its work force by 18,600 employees, or 25%, since the end of 2000. Brokerage firm Charles Schwab Corp. has dismissed 9,100 workers, or 35% of its staff, since its employment peaked at the end of 2000.”