Morgan Stanley To Cut Hundreds Of Jobs In Wealth Management As Growth Slows: Report

Morgan Stanley MS is set to enact job reductions within its wealth management sector, as newly appointed CEO Ted Pick initiates cost-cutting measures amid signs of a slowdown in this crucial segment of the firm's operations.

The Wall Street Journal reports Wednesday the impending layoffs will affect hundreds of positions, a modest fraction of the division's workforce, which totals less than 40,000, targeting a mix of roles including a few managing director positions and several non-client-facing staff.

The announcement of these layoffs is anticipated to be made public to the affected employees imminently, according to sources who spoke to WSJ. This move marks one of Pick's significant actions since assuming the role of CEO Jan. 1, succeeding James Gorman, who led Morgan Stanley for an extended period.

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Following a series of major acquisitions, wealth management has emerged as a key revenue and profit source for Morgan Stanley. The firm recently completed the integration of E*Trade, acquired in 2020 for approximately $13 billion, leading to the elimination of redundant roles and positions deemed non-essential.

The wealth management division, responsible for assisting clients with their financial and investment needs, manages around $5 trillion in assets, contributing to nearly half of Morgan Stanley's total revenue. 

Recent times have seen a deceleration in the wealth division's growth, with revenues remaining stagnant in the last quarter of the previous year compared to the same period a year earlier, the Journal reports. The net new assets saw a decrease of 8% in the same quarter following a 45% drop in the third quarter.

As of the end of 2023, Morgan Stanley's total workforce stood at approximately 80,000, a slight decrease from around 82,400 the previous year. 

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