Morgan Stanley CEO Says Lack of Attrition Led to 2019 Job Cuts

(Bloomberg) -- Morgan Stanley had to cut jobs last year because not enough employees made the leap on their own.

“We’ve had no attrition,” Chief Executive Officer James Gorman said Wednesday in an interview with Bloomberg Television in Davos, Switzerland. “Nobody’s leaving and we got to the end of the year and we said, ‘Does this really add up?’ We just promoted 130 new managing directors. You’ve got to create capacity for these folks.”

The investment bank eliminated about 1,500 positions globally, skewed toward technology and operations divisions, people with knowledge of the matter said in December. Executives in sales, trading and research were also affected by the cuts, which hit about 2% of the workforce.

Gorman, speaking on the sidelines of the World Economic Forum, called the moves “setting the table for the new year.”

Read more about Morgan Stanley’s job cuts

Morgan Stanley will eventually name a “president or presidents” to replace Colm Kelleher, who left last year, Gorman said.

In the wide-ranging interview, the 61-year-old CEO also touched on the global economy, central banks and Morgan Stanley’s business strategy.

Other highlights:

• On the economy: “We happen to be in a very benign period” with “relatively strong economic growth around the world,” Gorman said. “Not spectacular -- obviously Europe is slower than the U.S.”
• On interest rates: “The Fed only has two real tools that they’re working with at the moment and they’ve pretty much exhausted the rates,” the CEO said. “So they’ve only got balance sheet that they’re working with and it is a form of QE. It has been subsidizing prices, it’s been helping the markets along and they’ve done it for good reason.”
• On strategy: “I’m constantly looking for ways to grow wealth and asset management without shrinking the investment bank,” Gorman said, adding that acquiring a bank would only happen if the purchase “brings real scale” at the right price. He said the firm is instead building banking operations itself, including its online presence. “We’ve got enormous scale,” he said. “What we need is more product coming through it.”

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