BENGALURU – Investment banking giant Morgan Stanley is planning to cut hundreds of jobs in its wealth management unit, according to a person familiar with the matter.

It is the latest in a string of layoffs that Wall Street firms have undertaken since 2023.

The cuts will impact less than 1 per cent of the division’s employees, the person said.

While hopes of a soft landing for the economy have grown in recent months, companies are still looking to trim costs amid uncertainty around the trajectory of interest rate cuts by the United States Federal Reserve.

In the last quarter, revenue from Morgan Stanley’s wealth management unit was flat compared with a year earlier, and the medium-term margin forecast for the business was below what some analysts expected.

The unit became an important moneymaker for the bank after it clinched major acquisitions, including Eaton Vance and E*Trade, under former chief executive officer James Gorman.

The unit has helped make Morgan Stanley less dependent on its traditional mainstays of trading and investment banking, revenues from which can be volatile.

In January, the bank’s new CEO Ted Pick reiterated the target, set by Mr Gorman, of reaching US$10 trillion (S$13.5 trillion) in assets under management.

The workforce reduction would be one of the first significant moves by Mr Pick, who took over the helm at the beginning of 2024.

The bank had nearly 80,000 employees as at the end of 2023, its latest quarterly report showed.

Morgan Stanley’s job cut plans were first reported by Wall Street Journal. The bank declined to comment.

REUTERS