By Joseph A. Giannone
NEW YORK (Reuters) - Morgan Stanley
Morgan Stanley, which controls the Morgan Stanley Smith Barney venture owned jointly with Citigroup
Recruiters, citing conversations with advisers and managers at the firm, say additional cost cutting measures are expected to be announced in the coming weeks.
Among the changes under discussion, they said, is a 10 percent cut in the venture's 120 branch "complexes", which are groups of branch offices in a city or region that share compliance and administrative staff.
Morgan Stanley spokeswoman Christine Jockle declined to comment.
Morgan Stanley is eager to slash spending in the brokerage division after all of its nearly 17,000 brokers were transferred last month onto a common technology platform. Redundant offices from Morgan Stanley's and Smith Barney's nationwide networks will be closed, and support jobs will be eliminated.
It was not immediately clear how many jobs are in jeopardy, although as many as 100 offices could be closed, one of the sources said.
When the brokerages were first combined in mid-2009, Morgan Stanley Smith Barney had more than 950 U.S. branch offices, according to the bank's second quarter 2009 earnings report. At the end of June this year, the firm had 740 offices worldwide. Morgan Stanley no longer breaks out the number of U.S. locations.
The firm also wants more managers, who generally are responsible for recruiting and running offices, to advise clients so that they might also produce revenue.
One recruiter, Danny Sarch of Leitner Sarch Consultants, said the moves are part of a broader cost-cutting initiative known internally as "Project August."
Morgan Stanley has told investors its wealth management business, weighed down by an expensive merger integration and a tough market environment, can deliver mid-teens pretax profit margins. The margin improved to 12 percent in the second quarter after dipping as low as 8 percent.
(Reporting By Joseph A. Giannone; Editing by Edmund Klamann)