Morgan Stanley Smith Barney is laying off financial advisors, but the big bank denies that it has any major layoff planned, as was reported earlier this week by Fox Business News.
Fox caused a stir when it reported Wednesday that “someone with direct knowledge of the matter” had told the network that Morgan Stanley was planning “layoff scenarios” running into the thousands of employees, and that those getting the sack would include not just financial advisors, but also traders and investment bankers.
A Morgan Stanley spokesman interviewed by On Wall Street denied the story, saying, “anyone reporting that we are about to start laying off thousands of people is going to be seriously embarrassed."
It’s true, the spokesman said, that the company laid off 240 mostly younger financial advisors in the first quarter, and that it has announced earlier that was likely to lay off another similar number of “poorly performing” advisors during the second quarter (the actual number who were dropped will be announced on July 26). But there are no mass layoffs, or layoffs of other categories of employees, planned at this time.
The talk of Morgan Stanley layoffs comes amid news that all the major Wall Street banks are suffering hits to their top lines, although at the same time a number are expected to post improved profits. An exception was JPMorgan Chase, which on Thursday reported a 7% climb in second-quarter revenue to $27.4 billion, with the analysts’ consensus forecast for second-quarter profit coming in at $5.4 billion.
Most analysts are expecting worse figures for some of the other big banks, though, with the NY Times reporting that Goldman Sachs revenues are expected to fall by 3.5% from a year ago, while Bank of America revenues could fall by as much as 15%. Morgan Stanley is also expected to report lower revenues for the quarter.