Morgan Stanley is planning to lay off around 3,000 employees from the global workforce amid recession fears. The fresh round of job cuts is likely to happen by the end of this quarter. This would amount to roughly 5% of staff excluding financial advisers and personnel supporting them within the wealth management division. Currently, the banking and trading group employs about 82,000 people. 

Though there is no official confirmation yet, people close to the development told Bloomberg, Morgan Stanley is expected to shoulder many of the reductions. 

The fresh round of layoff comes months after the firm trimmed about 2% of its workforce. Wall Street’s biggest banks offered few reasons for cheer while reporting first-quarter results after seeing their fees from helping companies with takeovers and raising capital — a proxy for the economy’s health — slump over the past year. The Federal Reserve’s desire to curb inflation through rate hikes and the ensuing regional-banking tumult have further damped activity

Chief Executive Officer James Gorman said last month underwriting and mergers activity has been subdued and that he doesn’t expect a rebound before the second half of this year or 2024.

In the first quarter, Morgan Stanley’s profit fell from a year earlier, dragged down by a dropoff in dealmaking, with a 32% decline in its merger advisory and 22% slump in its equity-underwriting business. Analysts are forecasting that revenue from banking fees will be in line with last year’s haul — which was roughly half the $10.3 billion that the bank pulled in during 2021’s dealmaking frenzy.

Revenue within the bank’s institutional securities group, which houses the bankers and traders, slid 11% in the quarter ending March. Its wealth-management unit went the other way, climbing 11% compared with a year ago.

The firmwide results also saw Morgan Stanley’s efficiency ratio — a measure of non-interest expense relative to revenue — hit 72%. The bank has spelled out a target of keeping that figure below the 70% mark.