Morgan Stanley CEO suggests job cuts may be in the works

Andrew Burton

Morgan Stanley (NYSE:MS) CEO James Gorman hinted at potential job cuts during the company's Q3 earnings call Friday morning, saying that management is working on headcount as it looks for efficiency.

"You've got to take into account the rate of growth we've had in the last few years, and we've learned some things through COVID about how we can operate more efficiently," he said.

Management is aiming to come up with a headcount plan before the end of the year, he added.

"We want to provide growth opportunities across the platform, but we've also identified some efficiencies. So over time, that will become clearer," Gorman said.

As for guidance, Chief Financial Officer Sharon Yeshaya expects net interest income through the end of the year to remain broadly in line with the guidance provided last quarter. The company doesn't generally give its next year's NII guidance until January. In Q2, the firm said it expected $500M of incremental net interest income spread across Q3 and Q4.

Q3 net interest income of $2.00B increased by $257M from $1.75B in Q2. Earlier, Morgan Stanley (MS) Q3 revenue missed, hurt by investment banking, and investing results. MS shares are down 5.4% in Friday afternoon trading.

SA contributor Logan Kane likes Morgan Stanley's (MS) low cost of deposits, potential for huge buybacks, and strong execution with accretive acquisitions.