Morgan Stanley is planning to cut a quarter of its workforce, all of which will be coming from the debt and currencies division, people familiar with the matter told The Wall Street Journal.
The job cuts are because of the Wall Street firm's belief that the already months-long slump in trading revenues will persist.
The people told The Wall Street Journal that the cuts will be occurring across all of the division's offices and each of the firm's trading desks.
The people add that London, though, is expected to shoulder a slightly bigger brunt of the job cuts than New York.
The Wall Street Journal adds that planned cuts reflect Morgan Stanley's acceptance that a slowdown in client activity may not reverse anytime soon.
The slowdown in client activity began during the summer months.
The Wall Street Journal adds that the company is also facing pressure from investors to lift its returns on equity.
The returns have often remained below the 10 percent target set by James Gorman, the chairman and CEO of Morgan Stanley.
Bloomberg adds that Morgan Stanley has reported a 42 percent drop in bond-trading revenue last month.
Gorman called the results its worst quarter for fixed income, currencies and commodities since he took over in 2010.
Bloomberg said that stiffer capital rules, a slump in client transactions and a shift towards electronic trading are the reasons why margins in key fixed-income markets have crimped.
These reasons have pushed banks to pull back and cut its staff.
Bloomberg adds that Colm Kelleher, head of the investment banking and trading division at Morgan Stanley, said last year that the new supplementary leverage ratio made banks unable to earn sufficient returns in some interest-rate trading businesses.
The supplementary leverage ratio measures a firm's capital against total assets.
Steven Chubak, an analyst with Nomura Holdings, told The Wall Street Journal that he estimates Morgan Stanley's fixed-income arm will generate a five percent return on equity this year.
Overall, the company's return on equity is expected to be around nine percent this year.
