Morgan Stanley announced Wednesday the company will lay off 1,000 employees as it scales back residential mortgage operations in the U.S. and closes a UK-based subsidiary, Advantage Home Loans.
Morgan Stanley, which reported $9.4 billion in mortgage-related write-downs in the fourth quarter, said it will continue to service U.S. mortgage loans through Fort Worth, Texas-based subsidiary Saxon Mortgage Services Inc., and offer residential mortgages to retail brokerage clients through Morgan Stanley Credit Corp.
“Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward,” said Anthony Meola, chief operating officer of Morgan Stanley’s U.S. residential mortgage business, in a statement.
Morgan Stanley and its subsidiaries employed 48,256 workers globally at the end of November, according to the company’s annual report to investors.
The company’s $9.4 billion in fourth-quarter write-downs included $7.8 billion related to U.S. subprime trading positions, mostly derivative positions in collateralized debt obligations (CDOs), and $1.2 billion related to commercial mortgage-backed securities, alt-A residential mortgages and other loans.
