The New York-based investment bank is finalizing a plan to cut another 5 percent of its workforce, across all business sectors and primarily in the United States. Brokers, who make money largely on a commission, will not be affected by the cuts.
Morgan has 46,000 employees, including 8,000 brokers.
“We are constantly evaluating business conditions to ensure we are right-sized and we continue to do that,” a Morgan spokesperson said.
The cutbacks come after Morgan has already announced a $9 billion write-down, primarily because of bad mortgage bets. The investment bank posted a mild rebound in the first quarter, even as fellow banks Citigroup and Merrill Lynch continued to struggle. Morgan reported net income of $1.5 billion during the first three months of the year, still a significant drop from $2.5 billion in the first quarter of 2007.
The job cuts are expected to start this week and continue through the end of June, and Morgan chief executive John Mack hopes these cuts will be the end of Morgan’s layoffs through 2008, according to CNBC. The company already cut about 2,800 employees, or 5 percent of its workforce, earlier this year.
Morgan is far from alone in the pink slip parade. Merrill Lynch recently announced plans to cut 3,000 employees, on top of the 1,100 it laid off earlier this year, and Citigroup will eliminate 9,000 jobs. CIT Group shrunk its workforce by 500, or 9 percent, during the first quarter, and Wachovia laid off 12 percent of its investment bankers. In addition, about half of Bear Stearns Cos.’ 14,000 employees stand to lose their jobs as JPMorgan Chase & Co. swallows their firm through the end of June.