Despite a record year for revenues, Morgan Stanley has laid off about 3% of its workforce, or about 2,500 employees.
The job cuts were made across three major divisions of the bank: investment banking and trading, wealth management and investment management, but will not impact its financial advisors, the WSJ reported. Morgan Stanley’s layoffs are based on strategy and individual performance, and the bank intends to add headcount in other areas.
As of December 31, 2025, Morgan Stanley had 82,992 employees.
The Morgan Stanley layoffs come against the backdrop of a record year of revenue for the US-based investment bank. It also beat Wall Street estimates for fourth-quarter profit in January, driven by a 47% surge in investment banking revenue as dealmaking increased and loan underwriting fees nearly doubled.
Banking executives had taken an optimistic outlook for 2026 due to good pipelines for M&A deals as well as IPOs.
Meanwhile, AI disruption concerns in legacy technology businesses and volatile markets amid geopolitical turmoil are boosting trading desks as clients realign portfolios to hedge against risks.
There have been massive layoffs at US companies since the beginning of this year as they streamline operations amid the growing adoption of AI tools.
