Apparently it’s all down to a) desperation, and b) overstaffing. With profits at Morgan Stanley down 17% YoY in Q1, no one’s safe – even the sacred cows in prime brokerage and emerging markets.
“Most prime services businesses have let go at least one or two people, in some cases double digits,” says Andrew Morland, global prime services consultant at search firm Pelham International. “It’s causing a lot of frustration, particularly given a significant majority of the prime services groups are still making money.”
Morgan Stanley has let go more than one or two people. According to Financial News, it’s eliminated 31 managing directors and executive directors, of whom at least two were very senior people in prime broking.
One prime broking headhunter says most of those job losses were, in fact, in the prime broking business. “They let go of 20-30 people from prime services.”
He also says the cuts will make no difference: “Most of these people were client relationship managers, and Morgan Stanley has always been overweight in that area.”
The probability of Morgan’s pb victims finding new homes this year is infinitely small. “Prime broking business heads are saying they desperately need to make strategic hires, but they can’t get the headcount,” says Ben Dear, at search firm Mantis Partners. “The consensus view is that headcount will be released in November or December and there will be more jobs in January.”
Bart Turtelboom, Morgan Stanley’s co-head of emerging markets, who was also let go, may have more luck: “Russian banks like VTB are hiring emerging markets professionals in London,” says one headhunter. “It’s one of the few areas where hiring is still taking place.”