Morgan Stanley purges its wealth management department with hundreds of layoffs

Investment bank Morgan Stanley is in trouble. The financial firm plans to eliminate a hundred jobs with the aim of reducing its fixed expenses. According to the Wall Street Journal, the layoffs are set to impact the wealth management division, including several managers in this round of layoffs.

It is the first major internal management measure taken by the firm's new CEO, Ted Pick, since he took over the helm in January after the departure of James Gorman, a historical leader of the New York bank.

According to the same sources, the layoffs will affect around 1% of the total workforce dedicated to wealth management. This division has just under 40,000 employees. The personnel cut, in addition to managers, will harm the personnel who deal with the public as well as those in the backoffice. Those affected by the layoffs are expected to be notified to this week.

According to the Wall Street Journal , wealth management has become one of Morgan Stanley's main drivers of revenue and profits following a series of large acquisitions. In 2023, Morgan Stanley finished integrating E*Trade, which it bought in 2020 for about $13 billion, and now it eliminates overlapping positions and jobs that it would no longer consider necessary.

However, this division began to lose steam and its revenues completely stabilized in the last quarter of 2023. Net new assets amounted to $47.5 billion in that period, 8% less than the previous year and after a decrease of 45% in the third quarter.