REPORT: Morgan Stanley could fire a quarter of its fixed-income traders

Morgan Stanley is about to make deep cuts to its fixed income business.

That's according to Bloomberg's Ambereen Choudhury, Michael J. Moore and Hugh Son, who report that the cuts will take place over the next two weeks, citing two people with knowledge of the plans.

The cuts could amount to 25% of the fixed income workforce, according to the report.

Bond trading revenue was down 42% year-on-year at Morgan Stanley in the third quarter.

Morgan Stanley chief executive James Gorman called the quarter the worst for fixed income, currencies, and commodities since he became CEO in 2010, according to the Bloomberg report.

Across Wall Street, bond trading was hit hard during the third quarter as debt traders started worrying about a potential economic slowdown.

FICC revenues were down at all the major Wall Street banks. And front office headcount in FICC was down too.

While no other bank saw quite as stark a drop in revenues as Morgan Stanley in the third quarter (the next biggest drop was Goldman Sachs, with FICC revenues down 34% year-on-year), the big question now is whether any other banks will follow suit.

Goldman Sachs CFO Harvey Schwartz recently said that his firm has quietly cut fixed income headcount by more than 10% since 2013.

A spokesperson for Morgan Stanley said the bank would not comment.