Morgan Stanley job cut: lays off 1000 mortgage employees

In a first ever open move, the big financial institution, a Wall Street biggie, Morgan Stanley has declared that it is firing 1000 people from it mortgage jobs business segment. The move is done to cut down its US home lending business and will also fire some employees from a British Mortgage unit, an arm of Morgan Stanley.

The management has defended its decision by claiming that the job cut by Morgan Stanley was an effect of the deteriorated situation of the mortgage markets.

Who will be affected?
The Morgan Stanley Home loan or mortgage business employees who generate mortgage or home loan business from brokers or other parties as intermediaries, will be shown the door. Then there are some other bankers who would be involved in a kind of “securitization” or packaging these loans into bonds, will also face job cuts by Morgan Stanley. Including this one, Morgan Stanley has laid off a total of around 2,900 people in mortgages, wealth management, investment banking and capital markets since October 2007. This constitutes around 6% of the total Morgan Stanley employee strength.

After the job cuts, Morgan Stanley has now joined well over 100 mortgage lenders that have slashed jobs or gone out of business in the last year as the housing crisis deepened and credit conditions worsened. Last year, it was Lehman Brothers who had cut 1300 jobs in the mortgage division.

This is a clear sign that the major investment banks and financial institutions are not seeing a sooner end to the mortgage crisis in US and the other developed countries. Obviously the ripples will be felt by other emerging countries as well, on a global basis.

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