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Morgan Stanley is preparing to reduce its 80,000-person workforce by 2,000 employees later this month, marking the bank’s first significant round of layoffs since CEO Ted Pick took over in January 2024.
The workforce reduction will affect divisions across Morgan Stanley, except for its 15,000 financial advisers, per Bloomberg. The cuts are meant to keep costs down as executives face low attrition, or a low rate of employees leaving an organization through resignations, terminations, or retirements.
Some employees impacted by the layoffs will be let go due to performance issues, while others will be cut because AI and automation have replaced their roles within the bank. A source told Bloomberg that the bank expects to make more job reductions due to AI in the coming years.
Morgan Stanley isn’t the only major bank planning to cut roles due to AI. A Bloomberg Intelligence report released earlier this year surveyed chief information and technology officers at 93 major banks, including JPMorgan and Goldman Sachs, and 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 means up to 200,000 jobs on Wall Street are at risk of being cut due to automation.
Morgan Stanley has released several internal AI tools for employees. In September 2023, the bank rolled out an AI knowledge assistant tool that quickly finds information within Morgan Stanley research for financial advisers. In June 2024, the bank released another AI tool that takes notes and finds action items for financial advisers during their video meetings with clients.
Pick told investors in June that the AI tools could save employees between 10 to 15 hours per week.
“This is potentially really game-changing,” he stated at the time, per Reuters.
Ted Pick, CEO of Morgan Stanley. Photographer: Hollie Adams/Bloomberg via Getty Images
Morgan Stanley executives credited the new AI technology with helping the bank report record revenue and profits. Pick told CNBC in October that AI makes the bank more cost-effective and productive. In 2024, Morgan Stanley achieved record net revenues of $61.8 billion, up from $54.1 billion in 2023.
Morgan Stanley is the latest bank to plan layoffs. One of its rivals, Goldman Sachs, is aiming to cut 3% to 5% of its 46,500-person workforce in the coming months. Goldman will reportedly ask some managers located in major hubs like New York City to move to emerging locations like Salt Lake City and Dallas.
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