Morgan Stanley MS intends to cut roughly 2,000 jobs later this month to mitigate costs. This was reported by Bloomberg, citing people familiar with the matter.

Rationale Behind MS’ Job Cuts

Morgan Stanley aims to reduce 2-3% of its workforce to improve operational efficiency. The layoffs will take place across the firm, excluding 15,000 financial advisers.

While some of the forthcoming layoffs at the bank are based on employee performance, others are due to changes in locations where the company stationed its employees.

The financial sector had anticipated a robust recovery in capital markets this year following Trump's election. However, that optimism is yet to materialize into activity as markets struggle with the President's unpredictable tariff threats.

Daniel Simkowitz, co-president at Morgan Stanley, stated at a conference on Tuesday that new equity issues and mergers and acquisitions are "certainly a bit on pause, or the bar is high because of some of the policy uncertainties." Still, the bank was adding "real headcount" at senior levels of its investment banking arm, Simkowitz stated.

Morgan Stanley has implemented several job cuts in recent years to enhance operational efficiency. In January 2024, the bank conducted layoffs within its wealth management division, while in 2023, the company executed job cuts in the investment banking division.

The bank's recent move comes after a string of job cuts by other Wall Street lenders such as Goldman Sachs GS and Bank of America BAC in recent weeks as they aim to prepare to face an uncertain economic environment, particularly after Donald Trump’s recently announced tariffs against trading partners.

In March, Reuters reported that Goldman Sachs has brought forward its annual performance review process and plans to trim its staffing by 3% to 5%. Bank of America has eliminated 150 junior banker roles in its investment banking arm, Reuters reported earlier this month.

Morgan Stanley’s Zacks Rank & Price Performance

Over the past six months, MS’ shares have gained 15.3%, compared with the industry’s 12.6% growth.

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Currently, Morgan Stanley carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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