Morgan Stanley joined other Wall Street financial giants in cutting costs by announcing plans to eliminate 1,600 jobs as the European and the US economic turmoil continues to hit even the most profitable financial institutions.

Morgan Stanley will cut 1,600 jobs worldwide across all job levels in the first quarter or 2.6 per cent of its 62,648 strong workforce.

"As we conduct our year-end performance management process and evaluate the right size of the franchise for 2012, we anticipate the elimination of approximately 1,600 positions across the firm globally," Jeanmarie McFadden, a Morgan Stanley spokeswoman, said in a statement.

The job cuts announced yesterday represent the largest since the New York-based financial services firm laid off more than 2,500 employees during the global financial crisis of 2008-2009.

Although Morgan Stanley did quantify the savings it expects from the job cuts, it would help reduce the bonuses paid to employees, which account for a large part of their compensation package.

The cuts will not affect the firm's 17,000 financial advisors but some positions would be affected in its wealth management division, which has contributed over $10 billion to Morgan Stanley's overall revenue of $26.8 billion.

With revenues down by 29 per cent to $451 million in the third quarter and income falling 44 per cent to $212 million compared to the corresponding quarter last year, the job cuts have not surprised analysts as Morgan Stanley is only following other financial titans in reducing costs amid the spiralling European debt crisis and an overall slowdown in the global economy.

France's third largest bank by market value, Credit Agricole, today announced 2,350 job cuts, while others including Bank of America, Citi Group, HSBC, Credit Suisse, Goldman Sachs and JPMorgan Chase have all reduced their workforce ranging from 0.4 per cent to 10 per cent.

Falling revenues and tightening regulatory requirements have forced 24 financial firms around the world to cut or announce planned cuts of nearly 103,000 jobs, according to an analysis by The Wall Street Journal.

The New York City securities industry lost nearly $3 billion in the third quarter, according to a report released yesterday by Thomas DiNapoli, the New York State comptroller, while Fitch Ratings yesterday lowered its ratings on Morgan Stanley, Bank of America, Goldman and others, citing concerns on the banks' financial health and long-term stability.