Morgan Stanley looks to move jobs to cheaper cities in bid to cut costs
By Olivia Oran
(Reuters) - Morgan Stanley (MS.N: Quote) will be straying ever further from its Wall Street roots in the coming months as it shifts more operations to lower cost cities like Mumbai and Budapest as it aims to slash costs.
The investment bank on Tuesday announced an initiative to cut up to $1 billion by 2017 by using technology and outsourcing jobs now in its New York headquarters and other higher cost cities. However, it declined to give specific details about the number of jobs it would move to lower cost centers.
While shifting so-called back office operations to cities where salaries are a fraction of New York or London is not entirely new, the bank's Chief Executive James Gorman said the pace will now accelerate.
"We have too many employees based in high-cost centers doing work that can sensibly be done in lower cost centers," Gorman said on a fourth-quarter analyst call with analysts.
Morgan Stanley last April opened an 184,000 square foot office in Bengaluru, India that can house 1,400 staff to support the firm's technology and fund services businesses.
The firm, which is aiming to raise its return on equity to 10 percent from a current 8.5 percent, also has an office in Mumbai that houses 2,400 staff.
Morgan Stanley's Glasgow office is its second largest location in Europe after London with more than 1,300 employees, up from just 6 workers when the office was opened 15 years ago to support the firm's investment funds businesses, according to the company's website.
The bank also has two main hubs in Budapest which it opened in 2006, including a center to support the firm's fixed income trading business and an operation focused on operations and information technology. Continued...