Morgan Stanley cuts jobs and bonuses

Morgan Stanley is cutting its global bonus pool for the equities division by as much as 4% and dismissing some employees after the industry’s results flagged last year,  people with knowledge of the matter told Reuters.

Morgan Stanley, which ranked fourth for investment banking fees last year, cut more than 20 managing directors from its investment banking division globally, representing about 5% of the total, the sources said.

Wall Street firms that have been cost-cutting to improve profits in the wake of the financial crisis are set to focus on equities personnel after new issuance decreased in 2016. Stock traders and salespeople around the world may see compensation for the year fall 9%, the first drop since 2012, according to a November report from recruiting firm Options Group. Meanwhile, fixed-income personnel should see the first increase since 2012 after political events set off a frenzy of transactions, according to the report.

Morgan Stanley’s equities revenue dropped 3.5% to $6.08 billion in the first nine months of 2016. Citigroup Inc., Goldman Sachs Group Inc. and Bank of America Corp. all suffered declines of 12% to 14% in that business, while the biggest European investment banks all reported decreases of more than 20% on a dollar basis, according to Bloomberg report.

A Morgan Stanley spokeswoman declined to comment. The bank will offer more details about staffing and compensation next Tuesday, when it reports earnings.