Wall Street’s ups and downs: JP Morgan cuts staff, Morgan Stanley’s bankers get a raise
This week may have gotten off to a pretty upbeat start for a group of young bankers at one Morgan Stanley, but a group technology employees at JP Morgan Chase is now looking for new work.
JP Morgan (JPM) is reportedly cutting “hundreds” of tech support jobs, according to a Bloomberg article that relies on anonymous sourcing, the latest move in an industry-wide effort to trim down support staff amid the recent decline in trading revenue at many Wall Street banks. Meanwhile, a separate Bloomberg report on Monday featured inside sources claiming that Morgan Stanley (MS) is rewarding some of its youngest employees by raising base salaries for junior bankers by roughly 25%.
If the reports are accurate, the raises at Morgan Stanley would apply to the bank’s associate-level positions and vice presidents working around the globe in the investment banking and capital markets arms. Associates at the bank can make anywhere from $80,000 to $180,000 per year in base salaries, which does not include bonuses, while VP salaries range from $120,000 to $250,000, Bloomberg adds. The raises at Morgan Stanley are part of a larger initiative to improve workplace conditions at the bank and they are also meant, according to Bloomberg’s sources, to make up, in part, for the increase in deferred bonuses, which account for a sizable percentage of annual salaries, at the bank in recent years.
Morgan Stanley’s investment banking revenue in the first half of 2014 jumped 27% year over year and the bank’s profits more than doubled in the second quarter, even though fixed income trading revenue fell 17%. The bank’s stock was down 0.7% early Tuesday.
JP Morgan’s cuts are not totally unexpected, as the bank said in March that it would look to reduce its overall headcount by about 5,000 by the end of the year. The bank’s second-quarter earnings and revenue both dipped this year, but still outpaced estimates, with stock trading revenue in particular falling 10% from last year. JP Morgan’s stock is down 1%.
A JP Morgan spokesman declined to comment, as did a Morgan Stanley spokeswoman.