Morgan Stanley to layoff 3,000 employees in massive job cut.
Major Wall Street firms including Morgan Stanley, Bank of America, and Citigroup have turned to job cuts in recent weeks as a result of a deepening slump in IPOs and mergers. Morgan Stanley is planning to cut around 3,000 positions by the end of June. The layoffs are expected to impact banking and trading staff the most. The move shows that Wall Street is trying to cut expenses as the slump continues for longer than expected.
Wall Street is feeling the pinch as there are fewer initial public offerings (IPOs) and mergers this year. As a result, advisory firms such as Morgan Stanley, Bank of America, and Citigroup are resorting to job cuts.
Morgan Stanley plans to cut around 3,000 jobs by the end of June, which is roughly 5% of its workforce in New York, except for financial advisors and support staff who are spared from the cuts.
The layoffs will mainly affect banking and trading staff, as IPO volumes have dropped by 74% this year. Analysts criticized Morgan Stanley for higher costs while revenue declined in the first quarter.
Morgan Stanley's job cuts show that Wall Street is still struggling with expenses during this prolonged slump. Other Wall Street firms, including Goldman Sachs, have cut staff since September.
Meanwhile, big banks such as Citigroup and Bank of America have also made some job cuts, while top boutique advisor Lazard plans to cut 10% of its workforce this year due to restrained capital markets activity and salary inflation.
CEO Ken Jacobs said that things are not looking good compared to December or January.
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