Morgan Stanley plans to cut more than 3,000 jobs

BLOOMBERG

Morgan Stanley is preparing a fresh round of job cuts amid a renewed focus on expenses as recession fears delay a rebound in dealmaking.
Senior managers are discussing plans to eliminate about 3,000 jobs from the global workforce by the end of this quarter. That would amount to roughly 5% of staff excluding financial advisers and personnel supporting them within the wealth management division.
The banking and trading group is expected to shoulder many of the reductions. A spokesperson for New York-based Morgan Stanley, which employs about 82,000 people, declined to comment.
The cuts come just months after the firm trimmed about 2% of its workforce. Wall Street’s biggest banks offered few reasons for cheer while reporting first-quarter results after seeing their fees from helping companies with takeovers and raising capital — a proxy for the economy’s health — slump over the past year. The Federal Reserve’s desire to curb inflation through rate hikes and the ensuing regional-banking tumult have further damped activity.
Chief Executive Officer James Gorman said underwriting and mergers activity has been subdued and that he doesn’t expect a rebound before the second half of this year or 2024.
In the first quarter, Morgan Stanley’s profit fell from a year earlier, dragged down by a dropoff in dealmaking, with a 32% decline in its merger advisory and 22% slump in its equity-underwriting business. Analysts are forecasting that revenue from banking fees will be in line with last year’s haul — which was roughly half the $10.3 billion that the bank pulled in during 2021’s dealmaking frenzy.
Revenue within the bank’s institutional securities group, which houses the bankers and traders, slid 11% in the quarter ending in March. Its wealth-management unit went the other way, climbing 11% compared with a year ago.
The firm-wide results also saw Morgan Stanley’s efficiency ratio hit 72%. The bank has spelled out a target of keeping that figure below the 70% mark.
Job cuts across finance have returned since the pandemic, when banks held off on reductions to give employees stability and then fought for talent as deals picked up.