Morgan Stanley CFO Ruth Porat outlined a series of cost-cutting initiatives for the firm.   Speaking at the Deutsche Bank Global Financial Services Conference in New York, Ms. Porat told investors the firm could reduce its brokerage headcount within Morgan Stanley Smith Barney below its previously announced range of 17,500 to 18,500 financial advisers.  In March, Morgan Stanley laid off roughly 300 trainees and lower-producing brokers and reported 17,800 total advisers.

Morgan Stanley's is targeting roughly $500 million in cost savings beginning in 2012, which it expects to "build quickly" as it targets $1 billion in such savings over the next 3 years.  This may parallel efforts at other big banks, which are grappling with sluggish revenue growth in a tough operating environment as they face new regulations and capital requirements.

Back in February, Morgan Stanley announced that it had established an office of re-engineering and expense management under its new Chief Operating Officer Jim Rosenthal.

Among other things, Ms. Porat said the firm would more closely monitor a variety of expenses, including Blackberry usage of its employees and, within the brokerage joint venture, would work on electronically delivering more of its clients' statements.

Technololgy Investments Rising.   Like rival Goldman Sachs Group Inc., Morgan Stanley expects to continue investing in technology.  Ms. Porat said the firm has 14,000 technology-related employees and consultants globally, 1/3 of whom are working on the integration of Morgan Stanley Smith Barney.  Technology investments within its 3 main businesses - (i) institutional securities, (ii) global wealth management and (iii) asset management - will "help us to execute better for clients but lead to better cost savings over time."

An indication of today's difficult market is the drop in price of Morgan Stanley shares - they recently traded at $22.49, and are down 11% over the past 52 weeks.   For additional details, go to:   [WSJournal, 6/7/11 - subscription may be required.]

 

 

 

Morgan Stanley May Cut Brokerage Force Further
MORGAN STANLEY, FINANCIAL SERVICES, BANKING, JOB CUTS, RUTH PORAT, EMPLOYMENT,
Reuters
| 07 Jun 2011 | 11:35 AM ET