Morgan Stanley, the world’s largest investment bank, is preparing its second round of job cuts in six months due to the worsening economic outlook and a dearth of deals. According to the reports, Morgan Stanley aims to cut around 3,000 jobs in the second quarter of the current fiscal year.
According to a source, the investment bank is reviewing its staffing due to slow dealmaking and a challenging economic environment. This follows another quarter in which investment banking fees decreased, pushing overall revenue down roughly 2% to $14.5 billion.
Given the greater market uncertainties and high inflation, Morgan Stanley CEO Sharon Yeshaya stated last month that “expense management” was a priority.
It should be emphasized that Wall Street’s investment banks have experienced a drop in deal volume as investors became warier of turbulent markets and rapidly rising interest rates, which have already harmed several US banks and resulted in the demise of three significant lenders.
Meanwhile, initial public offerings (IPOs) have come to a halt as start-ups have shelved plans to go public, at least until investor sentiment improves. Mergers and acquisitions volumes have also dropped year on year in the first quarter, putting additional pressure on investment banks like Morgan Stanley.
Morgan Stanley CEO James Gorman stated in December 2022 that the bank would undertake “modest” employment cuts globally, but did not specify how many. The investment bank employed about 82,000 people as of March, and the layoffs will affect approximately 4% of its workforce.