Morgan Stanley cut about 2% of global staff on Tuesday, sources say
According to people with knowledge of the layoffs, Morgan Stanley laid off approximately 2% of its staff on Tuesday. A CNBC report first reported that the measures affected 1,600 of the 81,567 employees at the global investment bank. People who declined to be identified spoke about terminations at the company. Following rival Goldman Sachs and other Wall Street firms such as Citigroup and Barclays, Morgan Stanley is resuming an annual Wall Street ritual put on hold during the Coronavirus epidemic: the culling of underperformers. Before paying bonuses, banks usually trim 1% to 5% of the weakest workers to leave more money for the remaining employees.
As a result of the pandemic, the industry paused its practice in 2020. However, deals largely stalled after the Federal Reserve’s aggressive interest rate increases this year. The last firmwide reduction in force at Morgan Stanley was in 2019. Among the few categories of workers exempt from the cuts at the New York-based firm, known for its vast wealth management division and top-tier trading and advisory operations, is financial advisors. That’s probably because they generate revenue by managing client assets. A spokesman for the company declined to comment. Morgan Stanley, like its peers, has seen its headcount swell in recent years. The bank’s employee ranks surged 34% from the first quarter of 2020 to the third quarter of this year, although that includes the impact of two massive acquisitions. CEO James Gorman told Reuters last week that the bank was gearing up for “modest cuts,” but declined to cite specific timing or the magnitude of the dismissals. “Some people are going to be let go,” Gorman said. “In most businesses, that’s what you do after many years of growth.”