Morgan Stanley plans to cut around 3,000 jobs in the second quarter, marking its second round of layoffs in six months, according to a source familiar with the matter. The investment bank is reevaluating its headcount due to slow dealmaking and a challenging economic climate.
The move follows another quarter in which the investment banking unit’s fees declined, causing total revenue to drop nearly 2% to $14.5 billion. In response to the broader market uncertainty and rising inflation, Morgan Stanley CFO Sharon Yeshaya had highlighted “expense management” as a priority last month.
Wall Street investment banks have been adversely impacted by a slowdown in deals, as investors exercise caution amidst volatile markets and surging interest rates. Initial public offerings have slowed significantly, with startups postponing market debuts until investor sentiment improves.
Morgan Stanley CEO James Gorman mentioned in December that the bank would implement “modest” job cuts globally but did not provide specific numbers. With over 82,000 employees as of the end of March, the layoffs will affect nearly 4% of the bank’s staff.