Morgan Stanley Sheds 2,500 Employees in Companywide Layoffs

Morgan Stanley announced Thursday (March 5) that it would reduce its global workforce by about 2,500 employees, or roughly 3% of its total staff, according to reporting from The Wall Street Journal.

The reductions are broad in scope, impacting the firm’s three primary pillars: investment banking and trading, wealth management, and investment management.

The banks characterizes these moves as a response to shifting business priorities and location strategies, rather than a reaction to financial distress. Indeed, the layoffs follow a record-setting year when the investment banking and wealth management units both posted all-time high annual revenues. This suggests a strategic pivot toward leaner operations even in times of plenty. Within the wealth management division specifically — which accounts for nearly half of the firm’s total revenue — the cuts have targeted private bankers and back-office staff, including those responsible for processing mortgages for high-net-worth clients.

Morgan Stanley is not alone in this trend. Across the financial and technology sectors, several major players have recently cited operational efficiency and the advancement of artificial intelligence as primary drivers for reducing headcount. Companies such as Block and Salesforce have recently announced significant layoffs, with leadership often pointing to the capabilities of AI to handle tasks previously managed by white-collar professionals.

Morgan Stanley itself predicted these layoffs in February, commissioning a study that warned that the broader banking industry is entering a period of significant displacement. The study forecasted that AI and branch closures will lead to a 10% workforce reduction across the sector by 2030, potentially eliminating 200,000 jobs in the European Union alone.

Morgan Stanley’s researchers estimated that banks could realize efficiency gains of up to 30% by fully implementing these new digital tools.

While the current layoffs at the firm are attributed to performance and shifting priorities, they occur just as the firm’s own research highlights a future where middle-office, risk management, and compliance roles are increasingly automated. For professionals in the digital economy, the message is clear: even record profits may no longer serve as a safeguard against the industry’s drive for AI-driven efficiency.