Morgan Stanley trimmed 1,318 workers as it struggled through a tough first quarter hamstrung by low trading volumes and a big loss in Japan.
The firm ended March with just under 62,500 employees worldwide, 2.1% less than they had on payrolls three months earlier, according to an earnings release this morning.
Morgan Stanley also trimmed pay, setting aside $4.3 billion for its troops, a 1.9% decrease over the year-earlier period. If it continues to fund compensation at that pace, employees, on average will make almost $277,400 in 2011.
But the firm will likely have to improve results to maintain that threshold. Profit in the first quarter fell to $968 million from $1.8 billion, a 45.5% drop. While revenue fell to $7.6 billion from $9.1 billion, a 15.8% decline.
Trading at the firm was particularly disappointing, posting a 21% decrease in revenue.
Meanwhile, investment banking was one of the few relatively bright spots, posting 15% more in fees. CEO James Gorman called his i-banking team "a clear industry leader" in a statement this morning.
Earnings were also dragged down by a $655 million loss from Mitsubishi UFJ Morgan Stanley Securities Co., a Japanese securities firm in which Morgan owns a 40% stake. MUFJ blamed the huge loss on some bad market bets and lax supervision. It will reportedly cut 750 of its 7,000 workers this year and is considering a new management structure to be announced April 28.
The venture noted that the losses were not related to the earthquake and tsunami that rocked the country in March.
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