US banking giant Morgan Stanley has unveiled a $1bn cost cutting plan that it aims to achieve through outsourcing, technology streamlining, and other expense reduction measures.
Known as Project Streamline, the plan was announced by the bank’s chairman and CEO James Gorman at an investor presentation.
Under the new strategy, 1250 back office jobs will be relocated from costly locations to low-cost location such as Bengalaru, Glasgow and Baltimore. The move is projected to generate $100m in annual savings for the bank.
It looks to save another $150m by reducing contractor pay. The bank also intends to keep compensation pay in check.
To achieve cost cuts, the bank also plans to reduce the number of servers from 60,000 to 48,000 by the end of the year, and eventually 33,000 through 2017. Further, it looks to shed data centre numbers from nine to five in North America.
Overall, the bank is looking to increase its overall return on investment (ROE) to 9-11% from 7%.
"Project Streamline is not to be underestimated. This is a full-throated effort," Gorman said.