Morgan Stanley is making modest job cuts worldwide, Chief Executive Officer James Gorman said on Thursday, as sluggish deal markets weigh on Wall Street profits.
"Some people are going to be let go," Gorman said at the Reuters NEXT conference, without specifying numbers. "We're making some modest cuts all over the globe. In most businesses, that's what you do after many years of growth."
Corporations have postponed dealmaking as US inflation remains high. That has put pressure on investment banks that earned record profits last year from advising on mergers, acquisitions and initial public offerings.
In a wide-ranging interview, Gorman also praised billionaire Tesla Inc chief Elon Musk, one of the bank's clients.
"I wouldn't bet against Elon Musk," Gorman said. "He's probably, along with Steve Jobs and Bill Gates and one or two others, the most interesting entrepreneur of last 50 years. Who would not want to do business with a person who has that kind of capability," he added.
Morgan Stanley was among the lenders that provided $13 billion in financing for Musk's $44-billion acquisition of Twitter Inc.
Reuters reported in October that banks abandoned plans to sell the debt to investors because of uncertainty around Twitter's fortunes and losses, citing people familiar with the matter.
While Musk's management style has raised concerns among advocates of content moderation on one of the biggest social media platforms globally, he has also found support among C-suite executives.
On Wednesday, Netflix co-founder Reed Hastings called Musk "the bravest, most creative person on the planet."
Gorman said Morgan Stanley was targeting bringing in $1 trillion of new money from clients every three years. The bank plans to eventually boost assets under management to $10 trillion, he said, without specifying a timeframe for the target. Client assets, which include wealth and investment management businesses, were $5.4 trillion at the end of September.
After taking the helm at the Wall Street giant in 2010, Gorman has transformed Morgan Stanley into a more diversified firm less reliant on its traditional strengths - trading and investment banking.
He struck major deals including the acquisitions of money manager Eaton Vance, online broker E*Trade, stock-plan manager Solium Capital and Smith Barney, a brokerage and investment adviser that became a cornerstone of the bank's wealth management arm.
Wealth management accounted for 47% of Morgan Stanley's revenue in the third quarter, compared with 34% during his first quarter as chief executive.
After a dozen years leading the bank, Gorman said he was preparing four potential successors, without naming them. Morgan Stanley co-presidents Ted Pick and Andy Saperstein, chief operating officer Jonathan Pruzan, and head of investment management Dan Simkowitz are widely seen as contenders for the top job.
"I have a plan, and I don't do a lot of things by accident when it comes to running a business," he said. "There will be a plan, there will be a result, one of those four executives will run Morgan Stanley, we will hit $10 trillion in assets."