[NEW YORK] Morgan Stanley is planning to cut about 2,000 employees later this month in the first major workforce reduction under chief executive officer Ted Pick.
The cuts will take place across the firm, with the exception of its roughly 15,000 financial advisers, according to sources familiar with the matter. The plan for reductions at the bank, which has about 80,000 employees, was set in motion before the recent market tumult, the sources said.
The move is aimed at keeping a lid on costs as executives grapple with minimal attrition in their ranks. A spokesperson for the New York-based bank declined to comment.
Morgan Stanley’s cuts add to a series of workforce reductions across Wall Street as bosses navigate an uncertain economic outlook. Rival Goldman Sachs Group recently brought forward its annual cull to earlier in the year with plans to cut 3 to 5 per cent of staff this spring.
After Donald Trump won the US presidential election in November, bankers predicted a surge in activity, but so far that’s failed to materialise as clients wrestle with tariffs and other policy changes. Earlier this week, Treasury Secretary Scott Bessent said he’s not worried about the market swoon that shaved trillions of US dollars from equity indices, adding that “corrections are healthy, they are normal”.
Morgan Stanley co-president Dan Simkowitz said at a conference on Tuesday (Mar 18) that merger and acquisition announcements and new equity issuance are “certainly on pause”. Still, the firm is “adding real headcount” at senior levels of investment banking in anticipation of a capital-markets recovery, he said.
Some of the upcoming cuts are tied to performance, while others are the result of changes in where the firm bases some of its workers. A small portion reflect the impact of artificial intelligence and automation inside the firm – a dynamic that will drive an increasing portion of job reductions in the coming years, one of the sources said.
Shares of Morgan Stanley are down 6 per cent so far this year, the worst performance among major US banks. Pick took over as CEO at the start of 2024, and added the chairman role at the beginning of this year. He has largely stuck to the strategy devised by his predecessor, James Gorman, who ran the firm for more than a decade. BLOOMBERG
