Morgan Stanely will be cutting 1,200 jobs, including about 470 traders and salespeople in the company's fixed-income and commodities business, a person with knowledge of the matter told Bloomberg.
The company will be taking a severance charge of $150 million in the fourth quarter in the latest move.
The person, who asked not to be identified because the details aren't public, said that the number of traders and salespeople to be let go represents 25 percent of Morgan Stanley's fixed-income trading staff.
The rest of the job cuts will come from the company's infrastructure and support roles.
Colm Kelleher, the head of the investment banking and trading division of Morgan Stanley, said during an investor conference on November 17 that it is unclear how much revenue the fixed-income trading business can reliably bring.
Kelleher adds that the fourth quarter trading environment wasn't much better than the third quarter, where Morgan Stanley posted a 42 percent drop in fixed-income revenue.
The person told The Wall Street Journal that Morgan Stanley, though, has no plans of exiting any of its major fixed-income businesses.
These fixed-income businesses include corporate, government and mortgage bonds, as well as currencies and commodities.
The person also said that some desks will be scaled back, particularly the company's base metals trading.
Kelleher and Ted Pick, who was placed in charge of Morgan Stanley's trading unit in October, said in a memo to employees on Tuesday that "it is difficult to see colleagues depart, and we wish them well in their continuing careers."
They said that the job cuts "will result in businesses that are critically and credibly sized for the current market while maintaining the ability to deliver for our clients across products and geographies."
Morgan Stanley's shares went up last week, as reports of the looming job cuts have reached investors.
