After two years of growth: Morgan Stanley lays off about 2% of the workforce

by time news

The investment bank Morgan Stanley lays off about 2% of the workforce, according to a CNBC report. The bank employs about 81,500 people, of which about 1,600 worldwide will be laid off as part of the move.

According to the report, the investment advisory department at the bank is among the units that will not suffer from the cuts.

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The move is not unusual for investment banks, until the Corona it was common practice to reduce the number of employees between 1%-5% before the bonus period. In 2020, the practice stopped, because the Corona period led to sharp increases in the amount of investments, but now, with the aggressive interest rate increases on the Fed, the investment burst has stopped. This round of layoffs is the first at Morgan Stanley since 2019.

In the third quarter of this year, approximately 2,300 transactions were conducted in the company with a value of approximately 289 billion dollars. This is a decrease of approximately 64 percent in the value of the transactions, and a decrease of approximately 34 percent in the amount of transactions relative to the third quarter a year earlier, according to data from the EY company.

In addition, in the last year Morgan Stanley shares fell by about 12%, and now the market value of the bank is estimated at about 146 billion dollars.

US investment banks have increased their workforce in recent years. Morgan Stanley has increased the number of employees by 34 percent since the first quarter of 2020, including the acquisition of two investment advisory firms, according to the CNBC report.

Already last week, the CEO of the investment bank, James Gorman, told the Reuters news agency that they were preparing for a “slight reduction”, but did not provide details about the move. “Some people will go home”, he said, “In most businesses this is what happens after a few Years of growth.”

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