eFC Briefing: Morgan Stanley Ramping Up

The investment firm says it's plowing savings from a previous 10 percent staff reduction, toward hiring top talent cut loose by rival firms. As securitization deals evaporate, Cadwalader law firm lays off 96 attorneys, primarily real estate finance and securitization specialists. UBS names co-heads of prime brokerage in Europe.

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After cutting its payroll by $1 billion by eliminating 4,800 jobs, Morgan Stanley said last week it intends to reinvest as much as 100 percent of those savings on new hires. The bank already invested some $400 million in salaries and bonuses of new staff, and reportedly is looking to spend the remaining $600 million by by year-end for the right candidates. Its approach epitomizes the "opportunistic hiring" tack being taken by many other investment banks, both bulge-brackets and boutiques. Areas targeted for staffing up at Morgan Stanley include derivatives, risk management, and proprietary trading, according to the Financial Times.

Morgan Stanley's recent high-level additions reportedly include:

- Luc Francois (previously head of equities at Societe Generale) to lead European equities and global equity derivatives.

- Thomas Wong and Eric Cole (both ex-Bear Stearns) to lead proprietary trading and distressed sales, trading and research respectively.

- James Brown (from Merrill Lynch) as global head of commodities risk.

Blake O'Dowd (from Lazard) to head the restructuring group.

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Cadwalader, Wickersham & Taft laid off 96 U.S. and UK lawyers last week. All but a handful worked in its real estate finance and securitization practices. Cadwalader becomes the latest large law firm to undertake mass layoffs after the mortgage securitization boom turned into a bust. This is round two for the New York-based firm, which cut 35 lawyers in January. It will employ 580 lawyers as of September (including 150 real estate finance and securitization specialists), down from 720 at the end of 2007. All layoff victims will receive severance pay through year-end.

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UBS named John Holland and Martina Slowey as co-heads of European prime brokerage. Holland most recently served as global chief operating officer of the bank's cash-equities business. Slowey was global head of prime-brokerage sales, a role she will retain. Based in London, they'll serve as replacements for Robert Munro, who went on sabbatical in April, according to The Wall Street Journal.

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The days of Canadian financial services firms going on hiring binges are long gone, but unlike in the U.S., major layoffs aren't looming. Officials at the Investment Industry Association of Canada expect firms to continue hiring this year, though not as robustly as they have in the past, says Executive Director Ian C.W. Russell. Toronto-based recruiters say their clients haven't slowed hiring. However, Canadian financial companies are facing some of the same pressures as their U.S. counterparts, which is likely to affect their plans. One prominent firm that did announce a mass layoff is Canadian Imperial Bank of Commerce, which has the biggest exposure of any Canadian bank to the U.S. sub-prime mortgage market. In May, CIBC said it would eliminate 100 positions in CIBC World Markets, a 15 percent reduction.

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State Street Corp. and Fidelity Investments, two of the biggest financial employers in Boston, are continuing to hire even as their counterparts in Wall Street lay off tens of thousands. Although statements by the two companies may offer some optimism for job hunters worried about how the economy is impacting New England financial firms, area companies aren't hiring at the rates they did during the recent boom market. The non-profit New England Economic Partnership estimates a loss of about 5,000 financial services jobs in the region by the end of 2009.