Morgan Stanley has recently reduced its workforce in China by approximately 9%, affecting about 3000 employees, mainly in the asset-management division. The downsizing highlights the challenges faced by global financial institutions in China, similar to JPMorgan and BlackRock. The move was prompted by the country’s declining stock market, which is impacting the $3.8 trillion fund sector outlook. The company is now focusing on cost reduction and anticipating a delayed rebound in deal making amid recession fears.
Morgan Stanley Investment Management, China initiated staff reductions in December 2022, affecting approximately 15 employees, marking the first instance of staff reduction at Morgan Stanley’s China fund unit since acquiring full ownership in 2023. According to a Bloomberg report, CEO James Gorman acknowledged that underwriting and mergers activity has been subdued, expressing skepticism about a rebound until the second half of 2023 or 2024. Furthermore, the bank’s profit in Q1 reportedly declined from the previous year, primarily attributed to a downturn in deal-making.
Last year, the company cut 7% of roles in its investment-banking workforce in the Asia-Pacific region, influenced by strained relations with the US and a decline in economic growth, which have dampened deal-making activities.
The layoffs began in the last week of May 2023 and were said to have put at risk 40 jobs, including those within the capital markets unit.
