Morgan Stanley to axe seven per cent of staff

Morgan Stanley plans to cut more staff this year and expects headcount to fall by 7 per cent, or 4,100, as it prepares for weak economic growth globally and low trading volume, the investment bank said yesterday.

Morgan Stanley, reporting a 24 per cent decline in second-quarter revenue, is the latest bank to sound gloomy notes about the economy.

Banks have had to cope with companies' reluctance to issue debt and equity, the European debt crisis, and slow stock and bond trading.

But Morgan Stanley also had its own difficulties, including the threat of a debt rating downgrade, which clobbered its bond-trading business during the second quarter. The bank also faced broad criticism for its handling of the Facebook initial public offering: The shares sank 27 per cent on their first day of trading.