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Morgan Stanley is set to decrease its workforce by 2,000 employees later this month, marking the first substantial layoffs since Ted Pick assumed the role of CEO in January 2024. This decision reflects a strategic move to streamline operations amidst changing market dynamics.
The layoffs will span various divisions within Morgan Stanley, but notably, the bank’s 15,000 financial advisers will remain unaffected, as reported by Bloomberg. The rationale behind the workforce reduction is to manage operational costs in light of low employee turnover rates.
According to sources, some of the roles impacted by these layoffs stem from performance evaluations, while others are due to advancements in artificial intelligence and automation rendering certain positions obsolete. Analysts predict that more job cuts linked to AI developments could occur in the near future.
Related: AI Could Replace 200,000 Jobs on Wall Street, According to a New Report. These Are the Jobs Most at Risk.
Meanwhile, Morgan Stanley isn’t alone in the banking sector as the trend of job reductions linked to AI continues. A recent Bloomberg Intelligence report indicates that executives from 93 major banks, including names like JPMorgan and Goldman Sachs, anticipate laying off around 3% of their workforce in the next three to five years due to increasing automation in financial processes. This could potentially endanger up to 200,000 jobs on Wall Street.
Morgan Stanley has also been proactive in integrating AI into its operations. For instance, in September 2023, the bank launched an AI knowledge assistant designed to assist financial advisers by efficiently retrieving information from the bank’s research database. Additionally, in June 2024, another AI tool was introduced to facilitate note-taking and action item identification during client video meetings.
During a presentation to investors in June, Pick mentioned that these AI tools could potentially save staff members between 10 and 15 hours each week, underscoring the transformative potential of such technology in enhancing productivity.
“This is potentially really game-changing,” Pick remarked at the time, as noted by Reuters.
Morgan Stanley’s executives credit the deployment of new AI technologies with driving record revenues and profits. In October, Pick conveyed to CNBC that these advancements contribute to greater efficiency and cost-effectiveness for the bank, which reported net revenues of $61.8 billion in 2024, an increase from $54.1 billion in 2023.
As the trend towards automation continues, Morgan Stanley joins other financial institutions in predicting workforce adjustments. Competitor Goldman Sachs, for example, plans to eliminate 3% to 5% of its 46,500-person roster soon, while also encouraging certain managers in major financial centers like New York City to relocate to emerging markets such as Dallas and Salt Lake City.
Related: Goldman Sachs Asks Some Managers to Move From Major Hubs Like New York City to Emerging Regions Like Dallas — Or Quit
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