Morgan Stanley Layoffs: 3,000 More To Lose Jobs In Bank's Second Cut In Months

Global financial services firm Morgan Stanley plans to launch another round of job cuts in the second quarter.

An unnamed source told Reuters Monday that Morgan Stanley will lay off 3,000 of its workers in what would be the company's second round of job cuts in the past six months.

The upcoming layoffs would affect nearly 4% of the investment bank's 82,000 employees.

The source said that the latest round of job cuts was prompted by Morgan Stanley's slow dealmaking and tough economic headwinds.

In December last year, Morgan Stanley reduced its global staff by 2%, or roughly 1,800 workers.

Morgan Stanley's chief executive James Gorman said at the time that job cuts were expected, noting that the bank hadn't trimmed its workforce in the past couple of years.

"We're making some modest cuts all over the globe. In most businesses, that's what you do after many years of growth," Gorman previously told Reuters, without specifying numbers.

Despite a gloomy future for Morgan Stanley's workers, the company beat expectations as its wealth management revenue rose in the first quarter of 2023.

Morgan Stanley recorded an 11% jump in wealth management revenue from the year-earlier period to $6.6 billion. The division also brought in $110 billion in net new assets, according to the bank's chief financial officer Sharon Yeshaya.

According to Refinitiv, the bank earned $1.70 per share, higher than analysts' average estimate of $1.62 per share.

Other Wall Street firms also announced workforce reduction measures this year due to slowing mergers and acquisitions and economic uncertainties.

In January, Goldman Sachs began laying off 3,200 jobs, or 6.5% of its total workforce. The investment bank also launched a thorough review of the company's expenses, including bonuses and its purchase of two private jets.

Last month, Bank of America announced its plan to lay off as many as 4,000 of its workers, which represents 2% of the company's total workforce.

However, BofA CEO Brian Moynihan said the job cuts should not be viewed as a sign that it was bracing for a business slowdown.

On the other hand, some Wall Street firms are still not keen on joining the job cuts bandwagon.

Earlier this year, JPMorgan's chief financial officer Jeremy Barnum said the company continues to hire additional staff and is "in growth mode."

"[T]here will be different adjustments at different times, and we're seeing that all across the company," Barnum said, CNBC reported.

Citigroup also revealed that it is still "actively hiring to execute against our strategy."

In April, the Labor Department said it observed a modest increase in the number of Americans filing new claims for unemployment benefits.

Initial claims for state unemployment benefits clocked in at 245,000, beating economists' forecast of 240,000 claims.