Morgan Stanley to cut 1,000 jobs

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Morgan Stanley has said it is to cut about 1,000 jobs worldwide as the US bank dramatically scales back its home lending operations.

As part of the plans, the Wall Street giant will shut its UK residential mortgage arm and will reduce its lending business in the US.

The move comes as it struggles to reposition itself amid the worst US housing slump in two decades.

The UK property market has also cooled as lending costs have risen.

"Given the continued dislocation in the mortgage markets, we have restructured our residential mortgage business to ensure we are appropriately positioned for the environment going forward," said Anthony Meola, chief operating officer of the US residential business at Morgan Stanley.

In December, the bank reported a write-down of $9.4bn for the three months to 30 November because of losses from investments linked to US sub-prime mortgages that had gone bad.

Many of its rivals have also suffered as a result of exposure to the sub-prime sector, resulting in about 25,000 banking job losses over the past six months.

Over the weekend, finance ministers from the G7 group of industrialised nations said losses from the US mortgage crisis could reach $400bn.