U.S. investment bank Morgan Stanley will close its base metals trading desks globally as part of a plan to cut up to 25% of jobs in its fixed income and commodities division, a source at the company told Reuters on Tuesday.
The news agency reports that some jobs in precious metals and energy markets may also go, but the bank is planning to keep a market making presence in these areas because they are more likely to deliver the required profitability and returns.
The source also told Reuters that even though the bank would stop making markets in base metals, it would still offer a bespoke service in the sector to banking and corporate clients.
Bloomberg reported Tuesday that Morgan Stanley will take a severance charge of about $150 million in the fourth quarter as the company pares back its fixed-income trading business to improve profitability.
The charge will cover the cost of cutting 1,200 workers worldwide, including about 470 traders and salespeople in its fixed-income and commodities business, according to a person briefed on the matter. That amounts to 25% of Morgan Stanley’s fixed-income trading staff, with other reductions coming in infrastructure and support roles, said the person, who asked not to be identified because the figures aren’t public.