Jan. 24 (Bloomberg) -- Morgan Stanley, the second-biggest U.S. securities firm, plans to eliminate about 1,000 jobs as economic growth slows and the profit outlook dims, according to a person familiar with the matter.

The cuts will affect asset management, retail brokerage and support areas such as technology and administration, the person said. They aren't expected to target the New York-based firm's institutional securities division, which includes trading and investment banking, the person said.

Banks and brokers have eliminated at least 19,000 jobs in the past six months as they racked up $133 billion of writedowns and credit losses tied to mortgage securities. Morgan Stanley, which reported its first-ever quarterly loss last month, cut 900 jobs last year from areas that offered mortgages, packaged and traded debt securities and provided high-yield loans.

``The firm is engaged in an ongoing process of assessing its personnel needs in light of overall market conditions, business priorities and individual performance,'' said Jim Wiggins, a spokesman for the firm. ``This process will involve headcount reductions in some areas and additions in other areas.''

Morgan Stanley, which has lost 27 percent on the New York Stock Exchange in the past 12 months, fell 47 cents, or 0.9 percent, to $51.23 in composite trading at 4:18 p.m.

The new cuts, which will take place over coming weeks, equate to about 2 percent of the 48,256 people that the firm employed at the end of November. Lehman Brothers Holdings Inc. plans to let go 140 traders involved in home loans and securities based on them, a person familiar with the matter said today.

Gorman's Group

The affected divisions at Morgan Stanley report to James Gorman, 49, who took over as co-president of the firm at the end of November when Chief Executive Officer John Mack ousted former trading chief Zoe Cruz. Walid Chammah, 53, who was promoted to co-president at the same time as Gorman, now oversees the institutional securities division that was responsible for last year's losses.

Wall Street firms are preparing for a slowdown in economic growth, which tends to reduce demand for investment-banking services. Citigroup Inc., the biggest U.S. bank by assets, said last week it plans to cut 4,200 jobs. Lehman Brothers Holdings Inc., the fourth-biggest securities firm by market value, said it will eliminate 1,300 positions from a mortgage unit after cutting 2,450 jobs last year.

Sales of existing homes in the U.S. fell more than forecast in December, capping the biggest annual slump in 25 years, the National Association of Realtors said today in Washington.

Morgan Stanley's first-quarter profit is expected to drop 37 percent from a year ago, according to a Bloomberg survey of 14 analysts. The firm ranks no. 2 by market value behind New York- based Goldman Sachs Group Inc.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Last Updated: January 24, 2008 16:22 EST