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YORK — Morgan Stanley has laid off approximately 2,500 employees, or about 3% of its global workforce, in a sweeping reduction across its three major business divisions—even as the investment banking giant reports record financial results .
` The Layoffs
The cuts affect employees in:
- Investment Banking and Trading
- Wealth Management
- Investment Management
Notably, financial advisors in the wealth management division were not impacted . However, the reductions did include private bankers and back-office support roles, including staff handling mortgages for wealthy clients .
Many employees were notified on Wednesday, though the process began last week . The layoffs are global in scope, spanning both front-office revenue-generating roles and back-office positions .
\ Why Now? (Despite Record Profits)
The layoffs come at a counterintuitive moment. Morgan Stanley reported a banner year in 2025, with annual revenue hitting a record $70.6 billion . Fourth-quarter profit beat Wall Street estimates, fueled by a 47% jump in investment banking revenue as dealmaking surged and debt underwriting fees nearly doubled .
Banking executives have struck an optimistic tone for 2026, citing healthy pipelines for mergers, acquisitions, and IPOs .
So why the cuts? According to sources, the reductions are tied to:
The bank is also planning to add headcount in other areas as it reshapes its workforce .
Part of a Broader Trend
Morgan Stanley’s cuts are not isolated. Several major U.S. companies have announced workforce reductions this year as they streamline operations and integrate AI tools .
Late last month, payments firm Block, led by Jack Dorsey, cut over 4,000 jobs—nearly half its workforce—as part of an overhaul to embed AI across its operations . What’s Next
Despite the reductions, Morgan Stanley’s core business remains strong. Volatile markets—amid worries of AI disruption to legacy tech businesses and geopolitical turmoil—continue to boost trading desks as clients reposition portfolios to hedge against risks .
The bank intends to continue hiring in strategic areas even as it trims elsewhere .
