Morgan Stanley, one of the largest global investment banks, has reportedly announced plans to reduce its headcount by as many as 3,000 employees over the next two months. This comes as the latest in a series of job cuts by major U.S. companies during the second quarter of 2023, following recent cuts at Disney, Gap, Lyft, and Dropbox.
According to Reuters, Morgan Stanley’s decision to eliminate jobs is due to slow dealmaking and a tough economic environment, as the investment bank looks to control expenses amid an uncertain market outlook and elevated inflation.
Morgan Stanley’s investment banking unit has been hit hard by a downturn in deals as investors have grown more cautious about volatile markets and rapidly rising interest rates. This has already caused a decline in revenue for several U.S. banks and the failure of three prominent lenders. The slowdown has also led to a standstill in initial public offerings (IPOs), as many start-ups have postponed plans to go public until investor sentiment improves. Furthermore, Mergers and acquisition(M&A) volumes have halved in the first quarter from a year earlier, putting further pressure on investment banks like Morgan Stanley.
With over 82,000 employees as of March, the current layoffs will impact nearly 4 percent of the bank’s staff. The investment bank had also emphasised last month that ‘expense management’ was a top priority given the challenging market environment. These job cuts may help Morgan Stanley control costs and maintain profitability in the face of ongoing economic uncertainty.
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