Morgan Stanley to cut another 3,000 jobs as banking layoffs continue
Morgan Stanley is reportedly set to cut thousands of jobs before the midway point of the year, as the largest round of banking layoffs since the financial crisis looks set to continue.
The bank is looking to lay off 3,000 staff, Bloomberg reported, representing about five per cent of the bank’s staff. They are expected to be concentrated in the banking and trading group.
The move comes just months after the Wall Street giant laid off around two per cent of its global workforce back in December.
Morgan Stanley declined to comment on the report.
While many banks have recently reported bumper profits thanks to rising interest rates, banks that concentrate more on investment banking, such as Morgan Stanley, have suffered.
In its first quarter results profit slipped 19 per cent year-on-year to $3bn. Investment banking revenue in particular fell 24 per cent while fixed income – which was a bright spot for many banks this quarter – slipped 12 per cent.
Although Morgan Stanley’s chief executive James Gorman said there was a “growing M&A pipeline”, he admitted “it largely remains a back half 2023 and full year 2024 story.”
As the slump in dealmaking has continued into 2023, many banks have tried to cut costs.
Already a range of different banks have made large scale redundancies, including Goldman Sachs, Barclays and Citi. Just last week investment bank Lazard said it would reduce its workforce by 10 per cent this year as a result of the freeze in IPOs and mergers.
Across the industry, job cuts in 2023 have been the steepest since the financial crisis.
In many cases, banks took on new staff during the post-pandemic dealmaking frenzy. But after widespread geopolitical and macroeconomic volatility in 2022, demand for investment banking services declined significantly forcing banks to cut back.