Morgan Stanley cutting mortgage jobs
Morgan Stanley (MS) is cutting 1,000 jobs as it scales back its residential mortgage business. The move comes as no surprise, given the sharp pullback in the housing market over the past year. Morgan Stanley rivals such as Bear Stearns (BSC) made deep cuts in their own mortgage businesses last year as the mortgage market ground to a halt.
The mortgage crisis has already had a lasting impact on Morgan Stanley: In December, the firm took a $9.4 billion writedown of mortgage-related securities and bid adieu to Zoe Cruz, the executive who had been seen as the heir apparent to CEO John Mack. Morgan Stanley also raised $5 billion from Chinese investors to rebuild its capital base. Now, acknowledging the “continued dislocation in the mortgage markets,” the firm says it has “restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward.” That is, a much less forgiving environment.
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