Morgan Stanley cutting workforce while Goldman warns of job cuts

Morgan Stanley cutting workforce while Goldman warns of job cuts
As the U.S. braces for a recession, Morgan Stanley is reducing its global head count.
DEC 07, 2022
By  Bloomberg

Morgan Stanley is embarking on a fresh round of job cuts as rival banks sounded caution that a looming U.S. recession will dampen hiring. 

Morgan Stanley will reduce its global workforce by about 1,600, amounting to roughly 2% of the total, according to a person familiar with the matter. The bank had more than 80,000 employees at the end of the third quarter, compared to about 60,000 just before the pandemic began. 

Meanwhile, Goldman Sachs Group Inc. Chief Executive David Solomon said the bank may have to prune staff in certain areas and exercise caution with its financial resources amid mounting economic uncertainty. And Bank of America CEO Brian Moynihan said during an interview with Bloomberg Television Tuesday that as fewer bank employees decide to leave, the company is slowing hiring in an attempt to manage head count ahead of a downturn.

The statements underscore the pain sweeping the U.S., with layoffs and hiring freezes extending beyond the technology industry where Facebook parent Meta, Amazon.com Inc. and Apple Inc. have begun shedding jobs or pausing hiring. 

“You have to assume that we have some bumpy times ahead,” Solomon said in an interview. “You have to be a little more cautious with your financial resources, with your sizing and footprint of the organization.”

Goldman’s business lines are closely linked to the economy, and the bank has forecast slowing growth ahead. That would mean the New York-based firm will have to make some tough decisions, Solomon said, especially since a soft landing is far from assured. Solomon said the U.S. could see a recession in 2023, even though the bank’s economists say it could still avoid one.

Goldman embarked on its biggest round of jobs cuts since the start of the pandemic in September, with plans to eliminate several hundred roles. The bank said in July that it planned to slow hiring and reinstate annual performance reviews — foreshadowing the job cuts it planned to undertake later in the year. It’s an effort to rein in expenses amid what it called a “challenging operating environment.”

“It shouldn’t be surprising to people — watching the performance of the business this year — that 2021 was an exceptional year,” Solomon said. “2022 is a different year, and so naturally compensation will be lower.”

‘MORE CAREFUL’

Wall Street is facing a tricky balancing act to keep a lid on total spending while preventing defections by its top performers. 

“We seek talent all the time — we bring them in the company,” Moynihan said. “We’re just more careful about it in times like this.” 

Bank of America is also focused on paying and promoting existing employees, he said. “We want to take care of our own first — that’s the principle.” 

The company is still hiring relationship managers in business and commercial banking, as well as financial advisers, private bankers and other employees in bank branches, Moynihan said.

‘IN the Office’ with Stifel CEO Alex David

Latest News

Farther debuts AI investment proposal tool for advisors to win clients
Farther debuts AI investment proposal tool for advisors to win clients

"Im glad to see that from a regulatory perspective, we're going to get the ability to show we're responsible [...] we'll have a little bit more freedom to innovate," Farther co-founder Brad Genser told InvestmentNews.

Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler
Barred ex-Merrill Lynch advisor arrested in alleged $2.6M theft of former Miami Dolphin Pro Bowler

Former advisor Isaiah Williams allegedly used the stolen funds from ex-Dolphins defensive safety Reshad Jones for numerous personal expenses, according to police and court records.

Are you optimally efficient?
Are you optimally efficient?

Taking a systematic approach to three key practice areas can help advisors gain confidence, get back time, and increase their opportunities.

Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida
Advisor moves: Father-son duo leaves Raymond James for LPL, RayJay adds Merrill Lynch alum in Florida

Meanwhile, Osaic lures a high-net-worth advisor from Commonwealth in the Pacific Northwest.

Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B
Beacon Pointe adds six RIAs in two-month acquisition spree, boosting AUM by $2.7B

The deals, which include its first stake in Ohio, push the national women-led firm up to $47 billion in assets.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.