Morgan Stanley CEO vows no layoffs in 2020

Morgan Stanley CEO vows no layoffs in 2020
The bank's shares are off 30% so far this year amid concerns about loan losses and the impact of low rates on margins
MAR 26, 2020
By  Bloomberg

Morgan Stanley won’t cut its workforce this year even as the coronavirus pandemic sends markets into turmoil.

Chief Executive James Gorman told employees in a memo Thursday that the bank will take stock at the end of the year after central banks and governments have time to try to stabilize the economy.

“I am sure some, if not many, of you are worried about your jobs,” Gorman wrote in the memo. “While long term we can’t be sure how this will play out, we want to commit to you that there will not be a reduction in force at Morgan Stanley in 2020. Aside from a performance issue or a breach of the code of conduct, your jobs are secure.”

The bank’s shares are down 30% this year as banks have been pummeled by concerns that surging unemployment will spur loan losses while low interest rates weigh on margins.

About 90% of Morgan Stanley’s employees are working from home, Gorman said, as businesses around the world close down or keep their staff away from offices to stem the spread of the highly contagious virus. The “normal bonds created by everyday interaction with colleagues have surely been impacted,” Gorman said in his memo.

The memo follows Bank of America Corp.’s announcement last week that it’s hired 1,700 people so far in March. Most of the positions are in the bank’s consumer business, along with some support staff in its operations units, the lender said. JPMorgan Chase & Co., meanwhile, froze hiring across most of the firm, people familiar with the matter said this week.

In a memo last week, Gorman told employees that the economic turmoil doesn’t represent a crisis for the large banks, unlike in the 2008 recession, according to people with knowledge of the matter. Morgan Stanley and seven other giant U.S. banks have suspended stock buybacks, saying they will focus on supporting clients and the nation during the pandemic.

Morgan Stanley’s economists are among those on Wall Street who have declared that the pandemic has triggered a global recession. The bank’s team, led by Chetan Ahya, said a worldwide recession is now its “base case,” with growth expected to fall to 0.9% this year.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.