“Morgan Stanley Plans Job Cuts in Wealth Unit Amid Market Challenges”
Morgan Stanley, under the leadership of Chief Executive Officer Ted Pick, is set to implement significant job cuts in its wealth-management division, marking the first major workforce reduction since Pick assumed the role earlier this year.
Morgan Stanley, under the leadership of Chief Executive Officer Ted Pick, is set to implement significant job cuts in its wealth-management division, marking the first major workforce reduction since Pick assumed the role earlier this year.
According to sources familiar with the matter, the cuts are expected to impact less than 1% of the approximately 40,000 employees in the wealth-management business, which stands as the firm’s largest unit. A spokesperson for Morgan Stanley declined to comment on the development.
The decision to downsize comes amidst a challenging period for the bank, reflected in a notable decline in its share price, which has lagged behind those of its major US peers by approximately 10% this year. Last year, under the leadership of former CEO James Gorman, the company shed more than 3,000 jobs as part of a broader effort to manage expenses and mitigate the impact of a downturn in dealmaking fees.
The wealth-management division, which had previously enjoyed a boost from increased net interest income, now faces headwinds that could intensify if the Federal Reserve opts to lower interest rates later in the year. Additionally, the unit’s performance has fallen short of expectations, with net new assets remaining below $50 billion for consecutive quarters, notably below Morgan Stanley’s annual target of over $300 billion.
During the recent quarterly earnings call with analysts, CEO Ted Pick underscored the importance of the wealth segment, emphasizing the firm’s commitment to its growth. Last year, the wealth unit accounted for 48% of total revenue, surpassing the contribution from the investment bank, which stood at 42.2%.
The anticipated job cuts in the wealth-management division coincide with Morgan Stanley’s broader efforts to streamline operations and address challenges in a rapidly evolving financial landscape. The Wall Street Journal initially reported on the impending workforce reduction.
Sources By Agencies
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