Morgan Stanley and Citigroup have hit pause on layoffs as the coronavirus pandemic has led to a record level of unemployment claims and unprecedented economic uncertainty, according to sources.
On Thursday, Morgan Stanley pledged to not cut any jobs this year, according to a memo seen by Reuters, as the Wall Street bank sought to reassure worried employees during the coronavirus pandemic.
Contents of the memo were confirmed by a Morgan Stanley spokesman.
Citigroup Chief Executive Michael Corbat has also ordered a suspension of any planned layoffs, a source told Reuters. Further details were not immediately available.
“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,” Morgan Stanley CEO James Gorman said in the note.
Gorman also called the Federal Reserve’s “extraordinary” actions necessary.
The Fed slashed interest rates to near zero earlier this month. The central bank also announced programs that represent an unprecedented intervention to cast a financial lifeline to millions of American companies.
“Markets cannot function without liquidity, and the Federal Reserve and other global regulators have taken real steps to address this critical issue,” Gorman said.
“Way too many people” have lost their jobs overnight, and it is essential for governments to act as aggressively as possible, he added.
A record of more than 3 million Americans filed claims for unemployment benefits last week as strict measures to contain the coronavirus pandemic brought the country to a sudden halt, unleashing a wave of layoffs that likely ended the longest employment boom in US history.
“Aside from a performance issue or a breach of the Code of Conduct, your jobs are secure,” Gorman told Morgan Stanley’s 57,000 employees. “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.”
About 90 percent of Morgan Stanley’s employees are working from home.