(Adds detail on succession)
NEW YORK, Dec 1 (Reuters) – Morgan Stanley is
making modest job cuts worldwide, Chief Executive Officer James
Gorman said on Thursday, as sluggish deal markets weigh on Wall
Street profits.
“Some people are going to be let go,” Gorman said at the
Reuters NEXT conference, without specifying numbers. “We’re
making some modest cuts all over the globe. In most businesses,
that’s what you do after many years of growth.”
Corporations have postponed dealmaking as U.S. inflation
remains high. That has put pressure on investment banks that
earned record profits last year from advising on mergers,
acquisitions and initial public offerings.
In a wide-ranging interview, Gorman also praised billionaire
Tesla Inc chief Elon Musk, one of the bank’s clients.
“I wouldn’t bet against Elon Musk,” Gorman said. “He’s
probably, along with Steve Jobs and Bill Gates and one or two
others, the most interesting entrepreneur of last 50 years. Who
would not want to do business with a person who has that kind of
capability,” he added.
Morgan Stanley was among the lenders that provided $13
billion in financing for Musk’s $44-billion acquisition of
Twitter Inc.
Reuters reported in October that banks abandoned plans to
sell the debt to investors because of uncertainty around
Twitter’s fortunes and losses, citing people familiar with the
matter.
While Musk’s management style has raised concerns among
advocates of content moderation on one of the biggest social
media platforms globally, he has also found support among
C-suite executives.
On Wednesday, Netflix co-founder Reed Hastings
called Musk “the bravest, most creative person on the planet.”
Gorman said Morgan Stanley was targeting bringing in $1
trillion of new money from clients every three years. The bank
plans to eventually boost assets under management to $10
trillion, he said, without specifying a timeframe for the
target. Client assets, which include wealth and investment
management businesses, were $5.4 trillion at the end of
September.
After taking the helm at the Wall Street giant in 2010,
Gorman has transformed Morgan Stanley into a more diversified
firm less reliant on its traditional strengths – trading and
investment banking.
He struck major deals including the acquisitions of money
manager Eaton Vance, online broker E*Trade, stock-plan manager
Solium Capital and Smith Barney, a brokerage and investment
adviser that became a cornerstone of the bank’s wealth
management arm.
Wealth management accounted for 47% of Morgan Stanley’s
revenue in the third quarter, compared with 34% during his first
quarter as chief executive.
After a dozen years leading the bank, Gorman said he was
preparing four potential successors, without naming them. Morgan
Stanley co-presidents Ted Pick and Andy Saperstein, chief
operating officer Jonathan Pruzan, and head of investment
management Dan Simkowitz are widely seen as contenders for the
top job.
“I have a plan, and I don’t do a lot of things by accident
when it comes to running a business,” he said. “There will be a
plan, there will be a result, one of those four executives will
run Morgan Stanley, we will hit $10 trillion in assets.”
To view the Reuters NEXT conference live on Nov. 30 and Dec.
1, please click here.
(Reporting by Lananh Nguyen, Saeed Azhar and Megan Davies in
New York and Noor Zainab Hussain and Niket Nishant in Bengaluru;
Editing by Nick Zieminski and Sam Holmes)
Source: news.google.com
