Morgan Stanley, which had a global headcount of at least 80,000 employees at the end of last year, is preparing to reduce its workforce. Following the recent layoff of 3,000 employees in China, the bank plans to cut its total workforce by two to three percent, resulting in approximately 2,000 employees being let go by the end of March. This reduction will exclude financial advisors.
The aim of this workforce reduction is to improve operational efficiency. Reports indicate that these layoffs are not directly in response to current market conditions; rather, some will be based on employee performance while others will be tied to changes in location. However, it is noteworthy that Morgan Stanley continues to hire at senior levels within its investment banking division.
The earlier job cuts in China were motivated by challenges stemming from the country’s declining stock market, which has negatively impacted the outlook for the $3.8 trillion fund sector. This situation has led the bank to focus on cost reduction while anticipating a delayed rebound in deal-making due to recession fears.
In December 2024, Morgan Stanley Investment Management in China initiated staff reductions that affected around 15 employees, marking the first instance of a headcount reduction at the bank’s China fund unit since acquiring full ownership in 2023.
Last year, Morgan Stanley reduced its investment banking workforce in the Asia-Pacific region by seven percent. Media reports suggested that this decision was influenced by strained US-China relations and a slowdown in economic growth, which adversely affected deal-making activities.
The updates on Morgan Stanley’s cost-cutting efforts indicate a significant shift in its operational strategy as it navigates challenging market conditions.
