Morgan Stanley has announced a plan to cut 1600 employees in the first quarter of 2012, a cut that only represents 2% of their workforce; nevertheless, the cuts signal a change, as they are one of the last big Wall Street banks to announce major job cuts.

The job cuts will include cuts at all staff levels and geographic areas according to spokesman Mark Lake. These will include cuts in their investment banking, trading and back-office functions.

Analyst reports show that Morgan Stanley will, undoubtedly, report a loss in the fourth quarter. This is due to a special $1.2 billion charge that the bank just announced which is related to a settlement with the bond insurer MBIA Inc. Even without this charge, Morgan Stanley has had a difficult year. According to Atlantic Equities analyst Richard Staite, Morgan Stanley will earn only 15 cents per share for the fourth quarter, as compared to their 41 cents per share a year ago.