Faced with the cataclysm of the coronavirus, banks are increasingly doing the right thing by employees. As we reported earlier, HSBC has put its restructuring plan and 35,000 job cuts on hold. Morgan Stanley doesn't have a similar plan, but today CEO James Gorman told staff that the bank won't make any layoffs for the following eight months.
Gorman's full email to employees is below. The crucial paragraph is the penultimate one, where Gorman states: "...we want to commit to you that there will not be a reduction in force at Morgan Stanley in 2020." This doesn't mean there will be no cuts: Gorman makes it clear that poor performers and the poorly behaved will still be liable for extraction, but there won't be any cuts to preserve shareholder returns due to the virus.
Where Morgan Stanley has gone other banks may yet follow. As we reported earlier in the week, Jefferies has already offered similar assurances to its investment bankers in company-wide town halls. As entrepreneur Mark Cuban told CNBC earlier, if companies don't protect employees during the virus it will, "define their brand for decades.
"If you rushed in and somebody got sick, you were that company. If you didn’t take care of your employees or stakeholders and put them first, you were that company,” Cuban added.
James Gorman's email to employees:
I know your management teams across the Firm have been continuously communicating throughout this crisis, and I wanted to add an additional word. Approximately 90 percent of our employees are currently working from home. As a result, the normal bonds created by everyday interaction with colleagues have surely been impacted, so I am hoping that my perspective on the Firm and the crisis will be helpful.
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. 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. 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.
Turning to Morgan Stanley – all I can ask is that we do our best. I am incredibly proud of you! Working from home, supporting our clients and this great Firm, and helping your families throughout the physical and mental stress.
I am sure some, if not many, of you are worried about your jobs. 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. This decision was made with 100 percent support of the Firm’s Operating Committee. 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.
Again, thank you for what you do every day to make this Firm so special.
Stay healthy and positive!
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