Thousands await Morgan Stanley axe

THE prospect of more heavy job losses was hanging over the City with speculation that investment bank Morgan Stanley is set to axe thousands of staff worldwide.

Some of the cuts are expected in Morgan Stanley's London operation, which employs 6000 of its 58,000-strong global workforce. A Morgan Stanley spokeswoman refused to comment, though staff at the bank told Business Day an announcement was expected imminently.

Staff at fellow bank Dresdner Kleinwort Wasserstein are bracing themselves for a second round of job cuts in less than a year.

The firm's German parent, Dresdner Bank, said yesterday 3000 jobs would go across its corporate and markets division, though it is not clear how many are in London. DKW has already axed 200 staff this year.

Senior investment bankers fear that plunging revenues due to a lack of merger and acquisition activity make further widespread job losses across the City inevitable. They point out that despite some cutbacks, income from investment banking has fallen far further than the banks' overheads and that the gap will have to be bridged soon.