Morgan Stanley pulled the trigger. After its equities sales and trading revenues declined 21% in the first quarter, Bloomberg reported this morning that at least five people in the bank's London equities business have been made redundant. Morgan Stanley isn't commenting, but insiders say it happened last Friday - in time for the weekend.
The five ejected staff have a few points of commonality. Most are traders or high-touch sales traders and most have been in the market for ten years, at least.
There's Simon Mardel, a cash equities trader who began his career at Lehman Brothers pre-2001 and who moved to Nomura in 2008 before joining Instinet in 2012 and Morgan Stanley in 2014.
There's Matthew Bubba, an equity sales trader who's been in the market since 2008 and who spent his entire career at Morgan Stanley, initially in New York.
There's Robert Bloomer, who's been at Morgan Stanley for time immemorial - having started at the firm pre-2001.
There's Neil Taub, a sales trader who first surfaced at Merrill Lynch in London nearly 20 years ago and who had interludes at GFI Securities and the ill-fated Haitong International before arriving at Morgan Stanley in 2010.
And there's someone called Tom Cooper, about whom nothing is known but his name.
Despite the bad first quarter, London's equity headhunters say there have been surprisingly few redundancies across the market. "It's not the time of year for that," says one.
Coming 10 days before the end of the second quarter, Morgan Stanley's sudden cuts seem to augur badly for equities sales and trading revenues at the bank in the three months to June.
Last week, analysts at KBW predicted that equities revenues at U.S. banks would fall by an average 1.4% year-on-year in the second quarter and that European banks' equities revenues would fall by 6.5% in the same period. However, KBW's analysts predicted a more dramatic 11% drop at Morgan Stanley. The sudden removal of expensive high-touch traders before the quarter ends suggests the bank might have a reason to cut costs in a hurry. We will soon find out.
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