Morgan Stanley, one of the world’s biggest banking companies, is planning to lay off 2,000 employees this month. The company has a total of 80,000 employees, and this will be the first major layoff under the leadership of new CEO Ted Pick, who took charge in January 2024.
Why Is Morgan Stanley Laying Off Employees?
According to a Bloomberg report, the layoff will affect different divisions of the company. However, the company’s 15,000 financial advisors will not be affected.
The main reason for this layoff is cost-cutting. The employee turnover rate has been low, which means fewer people are leaving the company on their own. To manage expenses, Morgan Stanley is reducing its workforce.
Some employees will lose their jobs due to performance issues, while others will be replaced by AI and automation. Experts believe that in the coming years, more jobs will be lost due to AI.
Additionally, some experts link these layoffs to Donald Trump’s tariff policies. They believe that policy changes under his leadership affected many of Morgan Stanley’s clients, which might have contributed to the decision to reduce staff.
The Growing Impact of AI
Morgan Stanley is not the only bank reducing jobs because of AI. According to a Bloomberg Intelligence report, Chief Information Officers (CIOs) and Chief Technology Officers (CTOs) of 93 major banks, including JPMorgan and Goldman Sachs, have admitted that in the next 3 to 5 years, 3% of jobs in their banks could be lost due to AI.
This means that 200,000 jobs on Wall Street are at risk.
Morgan Stanley has already introduced several AI tools for its employees:
- In September 2023, the bank launched an AI Knowledge Assistant Tool to help financial advisors find research data quickly.
- In June 2024, another AI tool was introduced to take notes during video meetings and suggest action items for clients.
CEO Ted Pick told investors in June that these AI tools could save employees 10 to 15 hours per week, making their work more efficient. He called AI a “game-changer” for the industry.
Why Layoffs Despite Record Revenue?
Morgan Stanley reported a record revenue of $61.8 billion in 2024, up from $54.1 billion in 2023. Despite this, the company is cutting jobs.
There are two main reasons for this:
- AI and Automation – These technologies are reducing the need for human employees.
- Economic Uncertainty – Many Wall Street banks are downsizing due to financial instability.
Even Goldman Sachs, a key competitor of Morgan Stanley, is planning to lay off 3-5% of its 46,500 employees in the coming months.
These layoffs highlight a major shift in the banking industry, where technology is replacing human workers at an increasing rate. 🚨
