Investment banking giant Morgan Stanley is set to eliminate roughly 2,500 positions as workforce reductions persist throughout the financial sector this year.
The layoffs accout for roughly 3% of the workforce of the investment bank, news agencies The Associated Press and Reuters reported.
The job cuts were across the bank's three major divisions, investment banking and trading, wealth management and investment management, but do not affect its financial advisors, the reports said.
Morgan Stanley reported a banner year in 2025, with annual revenue hitting a record at the investment banking giant.
It also beat Wall Street estimates for fourth-quarter profit in January, fueled by a 47% jump in investment banking revenue as dealmaking surged and debt underwriting fees nearly doubled.
Banking executives had struck an optimistic tone for 2026 on the back of healthy pipelines for mergers and acquisitions as well as initial public offerings.
Meanwhile, volatile markets amid worries of AI disruption to legacy technology businesses and geopolitical turmoil continue to boost trading desks as clients reposition portfolios to hedge against risks.
The cuts are based on strategy and individual performance, and the bank intends to add headcount in other areas, Reuters said.
Like other firms, Morgan Stanley aggressively hired during the pandemic, going from 60,000 employees in 2019 to 82,000 employees by year end 2022. The company had 83,000 employees at the end of 2025.
Tens of thousands of job cuts have already been made just two months into the new year, many of them white-collar. The financial sector has not been immune.
Citigroup and Blackrock have reportedly trimmed back their headcounts, and last week, financial technology company Block, which owns Cash App and the point-of-sale company Square, announced it would lay off 40% of its workforce.
While Block founder Jack Dorsey cited productivity gains in AI as the reason for the layoffs, industry observers noted that Block effectively tripled its workforce from 2019 to 2025, from 3,800 workers to 12,000.
The Wall Street Journal first reported the layoffs at Morgan Stanley on Thursday.
