Bloomberg reports that Morgan Stanley and Citigroup are among Wall Street firms preparing to eliminate jobs as first-half revenue dropped for a third straight year.
Headcount at Morgan Stanley will decline by about 700 in the second half, bringing total 2012 staff reductions to 4,000, Chief Financial Officer Ruth Porat, 54, said Thursday in an interview. Deutsche Bank AG (DBK) is considering about 1,000 job cuts at its investment bank, while Citigroup plans to chop about 350, people with knowledge of the decisions said this week.
Trading and investment-banking revenue at the five largest Wall Street firms fell 18% in the second quarter as deal and trading volume dropped amid concern that Greece would leave the euro and the region’s sovereign-debt crisis would spread to other nations including Spain. The decline led to questions about whether banks could cut costs to improve returns.
'All of these earnings that came out, none of them changed the fundamental problem, which is Europe is in disarray and nobody is taking risk', Brad Hintz, a Sanford C. Bernstein & Co. analyst, said on Bloomberg Television. 'You have an environment where the Street can only tighten its belt'.
Bank of America Corp. (BAC), the second-biggest U.S. bank by assets, plans to trim $3bn in annual expenses from its investment-banking, trading and wealth-management units. The Charlotte, North Carolina-based lender didn’t say how many jobs it would be eliminating.
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