Morgan Stanley to cut investment team by 7%

Morgan Stanley is reportedly considering a 7% reduction in its Asia-Pacific investment banking workforce, amounting to approximately 40 jobs, according to a source with direct knowledge of the matter. The cuts are expected to primarily affect the investment banking and capital markets business in the region, excluding Japan.

These job cuts are part of the bank’s global effort to streamline operations and reduce expenses in response to market conditions. The source, who spoke on the condition of anonymity, cited the need to align staffing levels with the current economic environment.

Morgan Stanley had previously announced plans to reduce approximately 3,000 jobs worldwide in the second quarter, marking the second round of job cuts in six months. The bank’s decision to reevaluate staffing levels was driven by sluggish dealmaking and the challenging economic climate. With over 82,000 employees as of the end of March, a reduction of 3,000 jobs would represent a staff reduction of nearly 4%.

The global dealmaking landscape has experienced a significant slowdown, with corporate buyout activity hitting a ten-year low in the first quarter of 2023. In the Asia-Pacific region, deal values involving companies from the area reached $176 billion in the first quarter of 2023, a 34% decline compared to the previous year and the lowest level since 2013, according to data from Refinitiv. Capital markets activity across the region has also experienced a sharp decline. Advisors anticipate a weak outlook for Hong Kong initial public offerings (IPOs) throughout the remainder of the year.