Morgan Stanley CEO Promises No Layoffs This Year

CEO James Gorman says in an internal memo 'there will not be a reduction in force at Morgan Stanley in 2020.'
Author:
Publish date:

Morgan Stanley's  (MS) - Get Report top executive told employees there will be "zero layoffs" this year at the financial services company, according to a memo that was seen by TheStreet.

"I am sure some, if not many, of you are worried about your jobs," CEO James Gorman said in the memo. "While long term we can’t be sure how this will play out, we want to commit to you that there will not be a reduction in force at Morgan Stanley in 2020. Aside from a performance issue or a breach of the Code of Conduct, your jobs are secure."

Gorman said the decision was made with 100% support of the company's operating committee. 

Shares of Morgan Stanley were climbing 7% to $36.37 in trading Thursday.

Other financial services companies were advancing as well, including Citigroup  (C) - Get Report, Goldman Sachs  (GS) - Get Report, Wells Fargo  (WFC) - Get Report and JPMorgan Chase  (JPM) - Get Report.

Gorman's remarks came the same day the U.S. Labor Department reported that jobless claims for the week ended March 21 were a staggering 3.283 million as the coronavirus pandemic brings the economy to a standstill. 

About 90% of Morgan Stanley's employees are currently working from home, Gorman said, adding that, "as a result, the normal bonds created by everyday interaction with colleagues have surely been impacted."

"At the end of this year, we will know what we are dealing with, and hopefully the economy will be on the mend by then," Gorman said. "You have all seen the Federal Reserve actions which are extraordinary but, given the circumstances, necessary. Markets cannot function without liquidity, and the Federal Reserve and other global regulators have taken real steps to address this critical issue." 

Gorman added that slowly, "governments across the world are putting aside their politics to arrive at blockbuster support and stimulus packages."

"Way too many people have lost their jobs overnight, and it is essential for governments to act as aggressively as they can," he said. "Now governments are focused on the surge in unemployment and putting in place significant measures in support of consumers, small businesses and corporations. This of course will take some time, but is badly needed."

Markets were surging Thursday as investors embraced the passage in the Senate late Wednesday of a $2 trillion coronavirus aid bill. The massive stimulus package passed on a 96-0 vote in the Senate. The House was scheduled to vote Friday on the legislation.