Morgan Stanley Embarks on Hiring Spree

by StockJockey

Thursday, July 31, 2008 - 9:39 am

Shades of 2004? 1999?

Nope, the summer of 2008, and Morgan Stanley is pulling the ultimate counter cyclical move, pulling a Goldman, and snapping up laid-off talent:

Morgan Stanley plans to use up to $1bn saved from cutting 4,800 jobs this year to hire top-level executives and bolster its presence in areas such as derivatives, risk management and proprietary trading.

The aggressive hiring campaign is driven by Morgan Stanley’s desire to take advantage of the lay-offs among firms hit by the credit crunch to add expertise in fast-growing businesses and regions such as the Middle East and Asia....John Mack, chairman and chief executive, has told associates that the turbulence, which has caused 75,000 job losses in the US financial sector, is a historic opportunity to recruit bankers, traders and risk managers.

Morgan Stanley estimates it saved $1bn from this year’s compensation bill by cutting about 10 per cent of its workforce, particularly in areas such as investment banking, fixed income and research, in two waves of lay-offs in January and April.

People close to the company said it had already reinvested $400m of the savings in the salaries and bonuses of new staff. FT

The budget should leave enough money to snap up at least 200 derivative and prop traders, give or take, as the firm deploys resources from its shrinking equity research and sales and trading effort.

I have to hand it to John Mack, this is a bit unexpected and a master stroke to boot. It would appear Goldman and Morgan Stanley will power through the downcycle well ahead of their struggling competitors.

Shoot them a resume before the deluge hits...something tells me they will be overwhelmed.

Morgan Stanley could spend $1bn on new hires
Financial Times
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