Morgan Stanley is preparing to reduce its workforce by 2,000 employees later this month, according to sources, marking the first significant round of layoffs since Ted Pick took over as CEO in January 2024.
The cuts will affect divisions across the company with the exception of its 15,000 financial advisors, according to Bloomberg. The primary goal is to reduce costs amid low attrition, or a low rate of employees leaving the organization through resignations, terminations, or retirements.
Some employees will be let go due to performance issues, while others will be affected because AI and automation have replaced their roles within the bank. A source told Bloomberg that Morgan Stanley anticipates making more job reductions due to AI in the coming years.
This move follows a trend among major banks. A Bloomberg Intelligence report released earlier this year surveyed chief information and technology officers at 93 major banks, including JPMorgan and Goldman Sachs. The report found that executives expect to lay off an average of 3% of their workforce within the next three to five years as AI takes over tasks. That could put up to 200,000 jobs on Wall Street at risk of being cut due to automation.
Morgan Stanley has also released several internal AI tools for its employees. In September 2023, the bank rolled out an AI knowledge assistant designed to quickly find information within Morgan Stanley research for financial advisors. In June 2024, the bank released another AI tool that takes notes and identifies action items for financial advisors during their video meetings with clients.
Pick told investors in June that the AI tools could save employees between 10 and 15 hours per week.
“This is potentially really game-changing,” he said, according to Reuters.
Morgan Stanley executives have credited the new AI technology with helping the bank report record revenue and profits. In October, Pick told CNBC that AI makes the bank more cost-effective and productive. In 2024, Morgan Stanley achieved record net revenues of $61.8 billion, an increase from $54.1 billion in 2023.
Beyond Morgan Stanley, other major banks are also planning job cuts. Goldman Sachs, for example, is aiming to reduce its 46,500-person workforce by 3% to 5% in the coming months. Furthermore, Goldman is reportedly asking some managers in major hubs like New York City to relocate to growing locations such as Salt Lake City and Dallas.
