Morgan Stanley, owner of the world’s biggest brokerage, is eliminating fewer than 100 jobs as trading and deal volume fall amid the European sovereign-debt crisis, according to people briefed on the plans.
The cuts will come primarily from the trading business in Europe and Asia, said the people, who declined to be identified because the plans aren’t public. Other units within the firm’s institutional securities group may be affected, and some reductions may be made in the U.S., one of the people said.
Deal volume dropped and equity and credit markets fell in the second quarter on concern that Greece would abandon the euro and the debt crisis would spread to nations including Spain. Average daily volume on the London Stock Exchange fell 20 percent from the first quarter, and European merger activity in the period dropped 29 percent from a year earlier, according to data compiled by Bloomberg.
Morgan Stanley may earn 5 cents a share this quarter, excluding accounting adjustments tied to its debt, as it faces “weaker trading volumes and significant client risk aversion,” Ed Najarian, an analyst at International Strategy & Investment Group Inc., said in a June 26 note. That’s down from 71 cents in the first quarter.
The Financial Times reported the job cuts earlier today.