Jones Lang LaSalle


Morgan's retail squeeze
Underperforming offices targeted in reorganization; 30 managers fired
By Dan Jamieson
Published on May 15, 2006

Branch managers at Morgan Stanley are feeling the heat.

Late last month, the firm fired about 30 branch and complex managers, had other managers assume supervision of additional offices and told managers of offices with less than $10 million in revenue that their pay would be cut beginning next year. The small-office managers were given the option of going into production full-time to make up the shortfall.

The Manhattan-based firm also appointed 19 new district managers last month. They report to four new regional bosses put in place by retail chief James Gorman in March as part of a broad reorganization. Mr. Gorman, a former head of retail at Merrill Lynch & Co., took over the unit in February.

Some of the fired managers were "shown the door" without being given the choice of returning to the broker ranks, according to Danny Sarch, an industry recruiter in White Plains. He questioned how Morgan Stanley made the determinations of who would stay and who wouldn't.
A Morgan Stanley spokeswoman declined to comment.

One broker says offices generating less than $3 million in annual revenues have been targeted for possible closure; others say that lease terms and the presence of nearby branches will weigh more heavily on closure decisions. But few doubt that Morgan Stanley will consolidate offices.
Though anxiety remains high because of management restructuring and layoffs, many brokers give Mr. Gorman credit for opening up lines of communication.

Dan Jamieson is a reporter with Investment News, a Crain publication.