Morgan Stanley to lay off 3,000 employees amid fears of impending recession and cost-cutting measures

Written By Raunak Jain | Updated: May 03, 2023, 09:01 AM IST

Morgan Stanley to cut 3,000 jobs due to cost-cutting and recession fears.

The effect of the apprehension of an impending recession is being perceived in the workforce of numerous corporations, resulting in the termination of employees. This trend is evident in the past layoffs conducted by Meta, which has already retrenched thousands of its employees. Meanwhile, the investment banking behemoth, Morgan Stanley, is also joining the fray with its impending layoffs. According to reports, the corporation is expected to lay off around 3,000 employees due to its cost-cutting initiatives. It is also apprehensive of a possible recession in the coming months, prompting the retrenchment of its employees worldwide before the end of this quarter.

The job cuts at Morgan Stanley are estimated to affect approximately 5 per cent of its global workforce, as reported by Bloomberg. However, it is worth noting that the retrenchment will exclude the financial advisors and currency management division. Moreover, the company has already conducted a 2 per cent reduction of its workforce before this round of layoffs.

In a Bloomberg report, CEO James Gorman acknowledged that the company's projected return is not expected until the second half of 2023 or 2024. This statement is supported by the profit decline in Q1 compared to the previous year, which is due to a slowdown in the corporation's dealmaking activities. This is the reason behind the 3,000 employee layoffs.

Last month, Gorman also reported a decline in underwriting and merger activities, which he expects to persist until the second half of 2023 or 2024. This trend is not exclusive to IT companies, as financial sector giants like Morgan Stanley have also embarked on layoffs, with the company already firing 1,600 employees in December 2022, resulting in a savings of $133 million. Similarly, Goldman Sachs also laid off 3,200 people in January 2023. Many big companies fired thousands of their employees last year including Google, Amazon, Meta, Disney, Twitter and more.