Morgan Stanley has trimmed its workforce by around nine per cent in China, affecting about 3000 employees. The layoffs have reportedly impact the asset- management division. The downsizing underscores the challenges faced by global financial institutions in China, similar to JPMorgan and BlackRock.
The move is said to be prompted by challenges posed by the country’s declining stock market, impacting the $3.8 trillion fund sector outlook. Furthermore, the company now wishes to redirect its focus towards cost reduction, anticipating a delayed rebound in deal making amid recession fears.
In December, Morgan Stanley Investment Management, China initiated staff reductions, affecting approximately 15 employees, marking the first instance of staff reduction at Morgan Stanley’s China fund unit since acquiring full ownership in 2023.
According to a report by Bloomberg, CEO James Gorman acknowledged that underwriting and mergers activity has been subdued, expressing scepticism about a rebound until the second half of 2023 or 2024. Furthermore, the bank’s profit in Q1 reportedly declined from the previous year, primarily attributed to a downturn in deal-making.
Last year, the firm cut seven per cent roles in its investment-banking workforce in the Asia-Pacific region. As per media sources, the decision was influenced by strained relations with the US and a decline in economic growth, which have dampened deal- making activities.
The layoffs began in the last week of May 2023, were said to have put at risk 40 jobs, including those within the capital markets unit.
