Charlie Gasparino reports that Morgan Stanley is in for some deep cuts on Monday.
Bloomberg is also reporting 1,600 job cuts next week as well.
This shouldn't come as a complete surprise. Morgan Stanley's CEO James Gorman has always made it clear that Wall Street had to downsize and that he wasn't afraid to have his own employees feel the pain.
This falls in line with some dark predictions for what would happen all over the Street that we've been tracking for some time. When Detusche Banks announced 1,900 layoffs this summer, Meredith Whitney swooped in and said it was just the beginning.
She predicted 50,000 job cuts and lower compensation across the board even though the financial meltdown was, at that point, four years in the past.
In the longrun this is a good thing for the Street, according to Whitney. Banks simply aren't making enough cash to support the staffs they used to have, and shareholders aren't going to stand for banks that "over capitalized and sluggish."
That's what's causing the voluntary downsizing you see here (from Whitney, this summer):
"You can make great money in a utility type of business by borrowing cheaply and lending sensibly but that's not what's being done. The basic bank model has, is, and will be attractive. It's just you're combining everything and undercutting pricing in one place and trying to make up for it, effectively having loss leading businesses... it's not a business that works."
Strong words — and then she really dug in.
"You're either making money or you're not. If you're not making money get out of the business."
When Detusche Bank made its announcement this summer, the company's stock jumped. Morgan Stanley's is creeping up as well.