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November 13, 2008

Morgan Stanley Fires 10% of Staff

Morgan Stanley, the once-upon-a-time investment bank that has recently been converted into a bank holding company to avoid bankruptcy has announced plans to cut off ten percent of its staff in the institutional securities business unit.

These cuts come in addition to headcount reductions that have been disclosed earlier this year, Chief Financial Officer Colm CKelleher said at a Merrill Lynch & Co banking conference that took place in New York today.

The ex-investment bank’s plans can be found on the company’s website including information on the company’s future plans for survival amid the current economic environment. The areas to be reshaped include proprietary trading, principal investments, commercial real estate origination and prime brokerage, while the company is looking to maintain and even grow areas such as cash trading, equity derivatives, foreign exchange, rates, commodities, corporate credit, mergers and acquisitions and of course capital raising.

The latter is quite interesting as a concept taking into account the unprecedented illiquidity in financial markets and the absolute loss of investor’s trust and confidence in the global financial model/system.

Morgan Stanley stock is now trading at $13.19, and has lost 75.26% (or $39.97) of its value from the beginning of the year.

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