- The Washington Times - Thursday, February 14, 2008

NEW YORK (AP) — Morgan Stanley yesterday said it will cut 1,000 jobs as the nation’s second-largest investment bank trims its residential mortgage operations while the mortgage markets continue to deteriorate.

The New York-based company said it will shutter its business in Great Britain that issues home loans and significantly scale back its mortgage business in the United States. Morgan Stanley joins hundreds of lenders in scaling back operations as the worst U.S. housing market in 26 years slows economic growth.

“Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward,” said Anthony Meola, chief operating officer of the U.S. residential business.

Morgan Stanley said it will continue to service loans in the U.S. through its Saxon Mortgage Services units. It also will offer residential mortgages to brokerage clients through Morgan Stanley Credit Corp.

It couldn’t be determined how many people are employed in Morgan Stanley’s residential mortgage business.

Banks and brokers have eliminated more than 25,000 jobs in the past six months as they racked up $150 billion of write-downs and credit losses tied to mortgage securities. Morgan Stanley last month announced it was cutting 1,000 jobs in operations, technology and other areas because of the market downturn.

A spokesman for Morgan Stanley was unable to provide a breakdown on how many jobs would be lost in the U.S. and Great Britain. The company had about 48,000 employees overall as of November.

In December, Morgan Stanley took a $9.4 billion write-down because of losses on mortgage-related securities — and quickly raised $5 billion from Chinese investors to rebuild its capital base. Zoe Cruz, the company’s co-president who was considered to be an heir to Chief Executive John Mack, was forced out of her job.

Morgan Stanley shares edged up 52 cents, or 1.2 percent, to $43.23.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide