Morgan Stanley has become the latest US corporate giant to axe staff, with 3 per cent of its global workforce being made redundant.
The global bank is said to be laying off about 2,500 workers despite record revenues last year of more than $70bn (£60bn). It made profits of nearly $17bn.
It is unclear how many roles could be cut from its London office, which employs around 4,500 staff. The London office of Morgan Stanley has been approached for comment.
The move follows similar sweeping cuts at Nike, Dow and Amazon. The online shopping giant cut 16,000 roles in January and around 100 more this week from its robotics unit.
The Morgan job cuts are understood to come across all three of its major divisions – investment banking, wealth management and investment management.
The company told the Wall Street Journal that the cuts are a result of changing business and location priorities, as well as individual job performance.
While Morgan Stanley did not specifically mention the growth of AI as a reason for the job losses, there are fears across the economy of what impact the new technology could have.
Chief executive Ted Pick said in 2024 he believed AI would make his staff more effective, saving financial advisers between 10 and 15 hours a week.
Morgan Stanley shares were up slightly today at $167.58. They have more than doubled in the last five years.
If other large banks replicate Morgan’s move, that would mean tens of thousands of job losses on Wall Street and in the City of London.
City veteran Richard Hunter of Interactive Investor said: “For the moment, it remains a trickle rather than a flood. However, for the US jobs market as a whole, there are simmering concerns about the effects of AI automation.”
In the City in particular there have been nerves about a lack of new stock market flotations, heavy fee drivers for the investment banks.
Some bankers blame the London Stock Exchange Group, the owner of the stock exchange, for not promoting it as a venue for big flotations sufficiently.
One issue for staff is a push by the big banks to get them to return to offices full time.
JP Morgan’s chief executive Jamie Dimon has been particularly outspoken on this issue, insisting that working from home does not work for him.
The job cuts are not limited to the investment banks. Last year in September, Lloyds Bank said 3,000 roles would go, claiming staff were underperforming.
Even the Bank of England, traditionally seen as a job for life, said hundreds of jobs were at risk as part of a £45m cost-cutting drive.
