Morgan Stanley is mulling closing brokerage offices, cutting back on support staff and requiring some branch managers also to generate revenue as advisors in a bid to cut costs, Reuters reports.
According to the newswire, the firm has recently cut the number of regions to 12 from 16, eliminating four manager jobs. But recruiters, citing conversations with advisors and managers at Morgan Stanley, now say additional savings are expected to be announced in the coming weeks. One recruiter said the cost-cutting initiative is known internally as "Project August,” Reuters said.
The US bank is viewed to be under pressure to boost profit margins in its retail brokerage arm. Across its businesses, Morgan Stanley recently reported income from continuing operations of $563 million for the second quarter of the year, compared to income of $1.2 billion for the same period a year ago. The firm’s global wealth management segment, however, logged pre-tax income from continuing operations of $393 million for the second quarter of the year, up from $317 million for the same period in 2011.
The newswire attributed the story to three people “briefed on internal discussion.” Morgan Stanley had not responded to Family Wealth Report’s request for more information at the time of publication.
Morgan Stanley owns the Morgan Stanley Smith Barney brand together with Citigroup.