Morgan Stanley is set to cut around 2,000 jobs by the end of the month as part of a broader effort to enhance operational efficiency, according to a report from Bloomberg. At the same time, The Wall Street Journal reported that the investment bank is scaling back or restructuring its diversity, equity, and inclusion initiatives in response to internal backlash.
A source familiar with the upcoming layoffs told Bloomberg that cuts are companywide except for its 15,000 financial advisers. Workforce reductions at the 80,000-person bank were implemented before market turmoil sent the Nasdaq 100 Index down 7.3% on the year.
A spokesperson for the New York-based bank declined to comment on the cuts. However, the source said the reduction is based on "keeping a lid on costs as executives grapple with minimal attrition in their ranks."
The source said that some cuts are based on performance, while others result from changes in where MS bases some of its workers. Additionally, some reductions are attributed to increased efficiencies around artificial intelligence and automation within the firm.
At a conference earlier this week, Morgan Stanley Co-President Dan Simkowitz said that merger and acquisition announcements and new equity issuance are "certainly on pause."
Simkowitz said the firm is "adding real headcount" at senior levels of the investment banking unit ahead of a possible recovery in capital markets.
In addition to an imminent workforce reduction, a WSJ report states that MS' DEI obsession is now being "watered down" after internal turmoil, lawsuits, and backlash.
DEI created a mess at MS.
More from WSJ:
Today, the bank faces discrimination accusations and lawsuits, including several in recent months, from both white and Black workers, and criticism from staff who say the efforts either fell short or were unduly heavy-handed.
...
The workplace tensions at Morgan Stanley have flared as companies scrambled to respond to a national reckoning over race relations -- and then tried to temper the approach once the legal climate shifted.
While outside pressure has been the focus of the growing political and legal war against DEI, employees and executives have also clashed inside offices, as business leaders brought on consultants, training sessions and race-specific hiring targets.
Morgan Stanley is now watering down diversity initiatives it put in place, including after 2020.
Meritocracy > DEI.
