Morgan Stanley to cut 2% of its global workforce due to macroeconomic uncertainty

Owing
to the macroeconomic uncertainty derived from the ongoing U.S – China trade war
and the events of Brexit, businesses across the globe have struggled in the
past months. With the United States imposing new tariffs on steel imports from
Brazil and Argentina, and raging a new trade war against France and the
European Union at large, the global economic outlook has been getting grimmer
by the day.

Morgan
Stanley Says 1500 Of Its Employees Around The Globe Will Be Let Go

Amidst
the rising uncertainty in the global business environment, Morgan Stanley
announced on Monday that it plans on cutting 2% (around 1500 employees) of its
global workforce. As of September 30th, the
New York-based investment bank has a total of 60,532 employees. The jobs
cut is likely to hit the technology and operations department the hardest, the
company added.

Company
spokesperson, Mark lake, has refused to comment on the news at this stage.

The
investment bank had announced its performance results for the third quarter in
late October. As per the earnings report, Morgan Stanley had beaten the
analysts’ estimate by a significant margin. Based on Refinitiv’s data, experts
had anticipated slightly over $5 billion in revenue for the bank in the third
quarter while the actual figure was printed at $10.1 billion. Despite the optimism
of the quarterly results, the investment bank has decided in favor of cutting
jobs in the upcoming weeks.

Analysts
Expect Other Firms To Make Similar Announcements In The Upcoming Weeks

Following
the era of financial crisis that saw a sharp decline in trading revenues, it
emerged as a trend for listed firms to announce jobs cut towards the year end.
The strategy, as per the financial experts, helps firms to sidestep paying
bonuses. The experts further added that while Morgan Stanley is the pioneer of
deploying the long-held strategy in 2019, other firms can be expected to make similar
announcements in the upcoming weeks as planning for the next year approaches
its peak.

Morgan
Stanley’s performance in the stock market in 2019 has been fairly upbeat.
Having started the year at around $40, the stock has recently printed a year-to-date
high of $50 in November. This marks a gain of 25% in share prices in 2019. According
to the stock market analysts, Morgan Stanley has traded above the opening level
in 2019 for the most part, except for touching it briefly back in August and
again in October. The
investment bank currently has a market cap of $80.53 billion with a price
to earnings ratio of 10.62.