US investment bank Morgan Stanley on Tuesday is reportedly considering slashing 7% of investment bank jobs in the Asia-Pacific region, with China expected to deal the most significant blow.
Citing people with knowledge of the matter, the report stated that the layoffs could comprise 40 jobs, including those in the capital markets division. New York-based Morgan Stanley may reach out to affected bankers starting this week.
Other units may also be affected to some extent, while it has yet to be finalized precisely how many jobs will be cut, according to the people.
The bank was not immediately available to comment on the matter, while its shares shed 0.70% in pre-market trading on Tuesday.
Morgan Stanley Reviews Headcount as Deal-Making Slows
Morgan Stanley’s reduction in its Asia-Pacific investment banking workforce came as the firm plans to slash about 3,000 jobs from its global workforce by the end of the second quarter this year.
That represents around 5% of its personnel, excluding financial advisers and staff in its wealth management division. As of March 31, the bank had more than 82,000 employees.
The bank’s China unit is taking the biggest hit in the latest job cuts because, compared to most of the rivals of Morgan Stanley, it has created a larger team in Hong Kong, making it more exposed as softer economic growth weakened deal-making momentum.
Global mergers and acquisitions (M&A) activity hit a ten-year low in the first quarter of this year, with M&A volumes dropping 48% to $575.1 billion in March.
The company has already eliminated roughly 50 investment-banking jobs in Asia at the end of 2022 after it saw a decline in deal activity, with a huge number of the deals involving China-focused roles.
At the time, people familiar with the matter said the layoffs were among the highest for Wall Street firms in the previous year.
It is not a common occurrence in Asia to observe several rounds of reductions in the workforce being performed in quick succession. In the last five years, the region has accounted for 13% of Morgan Stanley’s group net revenue, bringing it to $6.7 billion by 2022 end.