By Kenneth Corbin

Morgan Stanley is reportedly planning to lay off about 2,000 employees but is exempting from the cuts its financial advisors, who have become an increasingly important engine of the company's growth.

The layoffs, reported by Bloomberg, are set to begin later this month.

The layoffs had been planned before the recent market upheaval and are aimed at controlling labor costs when employee attrition has been low, the news organization reported, citing anonymous people familiar with the situation.

Morgan Stanley declined to comment on the report.

Word of the layoffs follows similar moves from other big Wall Street financial houses that have been calibrating their responses to the economic uncertainty that has marked the first weeks of the new administration.

JPMorgan Chase, Goldman Sachs, and Bank of America have all been pressing ahead with staff reductions this year.

Meantime, financial stocks have been taking their lumps in the market as investors grapple with the fallout from President Donald Trump's tariffs as well as the potential for an economic slowdown that could eat into banking activities such as lending and deal financing.

The KBW Nasdaq Bank Index is down more than 4.4% for the year, with losses outpacing the S&P 500, which is off nearly 3.9% so far in 2025.

Morgan Stanley shares were changing hands at $119.49 early Wednesday afternoon, up 1.1% for the session. So far this year, Morgan Stanley stock has fallen nearly 5.3%.

The recent banking downturn represents a stark reversal of fortune for the sector, which to many analysts had seemed poised for a strong start to the year with a new administration promising lighter business regulation and a more deal-friendly approach to antitrust reviews.

But the stop-start nature of the president's trade wars and the legal uncertainty surrounding so many of the administration's actions have slowed any momentum that had been building for deal activity, leaving the investment banking sector largely on the sidelines.

Write to advisor.editors@barrons.com

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March 19, 2025 14:06 ET (18:06 GMT)

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