Morgan Stanley lays off 2,500 employees despite record profits in 2025

Job cuts hit bank's three major business segments: Investment banking and trading, wealth management, and investment management

Investment banking giant Morgan Stanley has laid off about 2,500 employees, roughly 3 per cent of its total workforce. The job cuts have affected employees across the bank’s three main divisions and come despite a strong financial performance in 2025, according to a report by The Wall Street Journal.

 

The bank employs around 83,000 people globally. Many of the layoffs took place on Wednesday, although some cuts had already begun last week.

 

Who all are affected by the job cuts?

 

The layoffs occurred across the bank’s three major business segments:

 

• Investment banking and trading
• Wealth management
• Investment management

 

In the wealth-management division, the job cuts have included private bankers and several back-office roles. Some of the impacted employees were involved in providing mortgage services to wealth-management clients. However, financial advisers within the wealth-management unit were not affected by the layoffs, according to The Wall Street Journal.

 

Why did Morgan Stanley carry out the layoffs?

 

Citing a person familiar with the matter, The Wall Street Journal reported that the changes are linked to new business priorities, office location adjustments and individual employee performance.

 

The layoffs have taken place both in the United States (US) and in other countries. The bank is also expected to hire more employees in other areas as it reshapes its workforce, reported Reuters.

 

Layoffs happening despite strong 2025 results

 

The job cuts come even though Morgan Stanley reported one of its strongest financial years in 2025. The firm recorded its highest-ever annual revenue in both its investment banking and trading businesses as well as in its wealth management division.

 

Investment banking revenue jumped 47 per cent in 2025 as dealmaking activity rebounded sharply, with debt underwriting fees nearly doubling during the year. The strong performance helped the bank beat Wall Street expectations for its fourth-quarter profit in January.

 

Banking executives struck an optimistic tone for 2026, citing strong pipelines for mergers and acquisitions as well as initial public offerings (IPOs).

 

Layoffs across the finance and tech sectors

 

The workforce reductions at Morgan Stanley are part of a broader trend across the finance and technology industries. Many US companies have been trimming their workforces as they restructure operations and invest more heavily in artificial intelligence (AI).

 

Recently, payments company Block Inc, led by Jack Dorsey announced plans to cut more than 4,000 jobs, nearly half of its workforce, as part of a major push to integrate AI across its operations.