Morgan Stanley intends to reduce its workforce by 3,000 units by the end of June, following the collapse of IPOs and M&As on Wall Street. It’s about the 5% of the staff globally, excluding the financial advisors division and wealth management division of the New York bank. This is the second round of layoffs in less than six months, as of December last year the bank laid off about 1,800 employeesor just over 2% of the global workforce.
The title loses the 2,7% a Wall Sttreet a quota $85 per share. For Morgan Stanley, this will be the second round of cuts in less than six months.
Morgan Stanley to cut 5% of workforce
As Bloomberg anticipates, the New York-based bank’s cuts will not include its financial advisor division and support staff, which will be spared. The layoffs are expected to be widespread in the rest of the sectors and have a greater impact on banking and commercial staff.
Currently Morgan Stanley employs 82,000 people. According to reports from the FT, the investment banking division is expected to be the most affected compared to the other divisions of the New York bank.
The lender headed by James Gorman he is not the only one who has embarked on a process of reducing the workforce, recently too Goldman Sachs, Citigroup e Bank of America they announced employee cuts to reduce costs.
The main reason, at least as regards the case of the bank led by CEO Gorman, is the lack of business relating to stock market listings or IPOs and M&A operations (mergers and acquisitions), which have fallen sharply due to the weakness of the markets. And therefore this forces the banks to reduce staff to deal with costs. According to data from Dealogic, IPO volumes on Wall Street fell by 2023 74% compared to last year.
Last month, analysts criticized Morgan Stanley following first-quarter numbers for the year that showed higher costs and declining profits. Expenses related to the group’s investment banking and wealth management division hurt profit margins in particular.
Wall Street in the red waiting for the Fed, the banks lead the sell-0ff
Wall Street banking sector leads today’s sell-off in anticipation of the meeting of the Fedscheduled for Wednesday 3 May.
The Dow Jones loses 576 pointsor 1.7%, the main S&P 500 index scores a – 1,7% at 4093 points. As the tech index, the Nasdaq Composite drops by1,5% a 12,036 points.
As we were saying, the banking sector is under pressure following the third high-profile collapse in a month, namely that of First Republic Bank. Despite reassurances from Jamie Dimon that the worst is in the past following JPMorgan’s purchase of First Republic, questions remain about the future of regional lenders. regional banks PacWest e Western Alliance they halted trading following a more than 20% plunge.
Meanwhile, shares of JPMorgan Chase were down 1%, giving back some of the previous session’s gains. Other financial giants, including Goldman Sachs, Bank of America and Citigroup, are also down more than 2.5% in today’s session.