Morgan Stanley lays off 3% of global workforce, affecting around 2,500 employees

Morgan Stanley has cut about 3% of its global workforce, affecting roughly 2,500 employees, even as the investment bank reported record annual revenue in 2025.

The layoffs span the firm’s three core divisions - investment banking and trading, wealth management, and investment management, the Wall Street Journal reported, citing people familiar with the matter. The cuts affect employees across several regions, including the United States and international offices.

The bank employs around 83,000 people globally, making the reduction one of the larger workforce adjustments on Wall Street in recent months.

Cuts spread across divisions

According to the Wall Street Journal, the reductions touched multiple functions across the organisation but did not include financial advisers, who remain central to the firm’s wealth management strategy.

In the wealth management unit, layoffs reportedly affected private bankers and support staff, including employees involved in servicing mortgage loans for affluent clients.

People familiar with the matter told the publication that the job cuts were tied to changing business priorities, performance assessments and adjustments to office locations, as the bank reshapes parts of its workforce.

Employees began receiving notifications this week, though the restructuring process had started earlier, according to the report.

Layoffs despite strong financial performance

The cuts come despite a strong year for Morgan Stanley.

The bank posted its highest-ever annual revenue in both investment banking and trading operations, as well as in its wealth management business, according to company disclosures cited in the report.

Deal activity rebounded sharply in 2025, with investment banking revenue rising 47%, while fees from debt underwriting nearly doubled as companies returned to capital markets.

The strong performance also helped the bank beat expectations for fourth-quarter profits, reinforcing the rebound in Wall Street dealmaking after a subdued period.

Part of broader restructuring on Wall Street

Despite improving revenues, workforce reductions have become increasingly common across major financial institutions as firms focus on efficiency and cost discipline.

Morgan Stanley has carried out several rounds of job cuts over the past few years, trimming headcount as market conditions shift and technology reshapes operational needs.

According to Reuters, bank executives remain optimistic about business prospects heading into 2026, citing healthy pipelines for mergers and acquisitions, initial public offerings and advisory mandates.

Trading desks have also benefited from volatile markets driven by geopolitical tensions and investor repositioning across sectors.

Workforce recalibration continues

The layoffs also reflect a wider trend across the finance and technology sectors, where companies are reassessing staffing levels while increasing investment in digital tools and artificial intelligence.

Recent months have seen multiple firms reduce headcount as they streamline operations and adapt to shifting market dynamics.

For Morgan Stanley, the latest cuts suggest a continued focus on aligning workforce structures with evolving business priorities, even as the bank enters 2026 with strong deal pipelines and renewed activity across capital markets.