Sign up today and take advantage of member-only content — the kind of timely, cutting edge industry insight that only Money Management Executive can deliver.
  • Exclusive Online Only Content
  • Free Daily Email News Alerts
  • Asset Management Blogs

Executives Regret Job Cuts

WASHINGTON D.C. - Phillip J. Purcell, chairman and CEO of Morgan Stanley Dean Witter of New York, and Charles R. Schwab, chairman and co-chief executive officer of Charles Schwab of San Francisco said their recent decisions to cut jobs were among the most regrettable of their careers.

Speaking at the general meeting of the Investment Company Institute of Washington D.C. last week, both executives said the layoffs were the first in both companies' histories. Schwab was forced to cut 3,000 positions or 13 percent of its staff, according to the company chairman. Morgan Stanley was forced to cut 1,500 positions, according to Purcell.

The executives also discussed the future of the financial services industry. Although mutual funds will always be an important product for American investors, managed accounts are growing at a faster rate because of some of the tax advantages they offer, Schwab said. In the next three to five years, the fund industry will continue to grow at approximately three to five percent annually, Schwab said.