The ax is scheduled to fall Thursday on the bottom 1,000 producers at Morgan Stanley’s retail brokerage unit, though some of the chopping has already begun, according to brokers at the company.
Morgan Stanley’s human resources department has created a performance-based formula for selecting the people it plans to let go and has distributed the list to branch managers, the brokers say. Further, it is rumored (on Registered Rep.'s message boards) that three reps have already been cut loose—two in Morgan’s Valencia, Calif., office and another in San Diego.
A Morgan spokesman declined to comment on any of the reports. The firm announced its plans to cut the bottom 10 percent of its workforce two weeks ago in a memo.
Top brokers could not confirm the specific layoffs in California, but they did say that the individual brokers who will be let go are expected to be notified on Thursday and that HR is sticking strictly to its formula, meaning it will not be listening to branch managers who might lobby to keep individual brokers.
Top brokers at the firm say they are actually looking forward to the blood-letting.
“They should be committing their dollars to people who are generating revenue,” says one. Those who remain at the firm will likely get to take on the clients of the departing reps. Typically, when a broker leaves Morgan Stanley, his clients are reassigned based on an office ranking system, says the broker, who spoke on the condition of anonymity. Those with a large asset bases, greater net-asset gathering capacities and more revenue tend to get the larger clients.
“The way I look at is whatever I get is gravy on the mashed potatoes,” the broker says. “Anything they dole out, I’ll certainly take, as long as it fits within my business criteria.”