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The job losses, announced internally last week, will alarm IT professionals in the finance sector. Analysts had predicted that the jobs of full-time IT staff were relatively secure because companies would lay-off contractors first to protect their permanent employees.
The job cuts at Morgan Stanley, which manages funds worth more than £300bn worldwide, are understood to be an attempt to cut costs following the slump in the economy.
The losses cover various sections of the company's IT department. About 80 jobs will go in the US. The firm did not reveal whether UK IT staff would be affected.
Last week Computer Weekly reported that Zurich Financial Services is to lay off more than one third of its IT staff, following the collapse of a proposed outsourcing deal.