Morgan Stanley Fires Hundreds in Wealth Management Division After New CEO Appointment

Morgan Stanley, a leading investment bank on Wall Street, announced on the 14th (local time) that it will again carry out layoffs involving hundreds of employees in its wealth management division this year, according to the daily Wall Street Journal (WSJ).

[Image source=Reuters Yonhap News]

According to the report, the layoffs will target less than 1% of the approximately 40,000 employees in the wealth management division. Sources said that affected employees could be notified of the layoffs as early as this week. The layoff list includes not only employees who do not interact directly with clients but also some managing director-level staff.

Notably, this round of layoffs is the first major move by Ted Pick, the newly appointed CEO who took office earlier this year. WSJ reported that Morgan Stanley’s wealth management division has become a key profit driver through a series of large acquisitions recently, and with the completion of the merger with E*TRADE last year, the company is now streamlining overlapping positions and roles, which is the background for the layoffs.

The wealth management division, which manages about $5 trillion in assets, is a major department responsible for half of Morgan Stanley’s total revenue. However, signs of growth slowdown have appeared, such as flat revenue in the fourth quarter of last year compared to the previous year, and net new assets are also on a declining trend. Additionally, the division faces multiple challenges, including regulatory investigations related to anti-money laundering.

Morgan Stanley also conducted layoffs involving about 3,000 employees in the first half of last year. As of the end of last year, the number of employees was 80,000, down from 82,400 the previous year.

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