Morgan Stanley is gearing up for a major shake-up in the Asia-Pacific region, with plans to trim about 50 investment-banking roles this week. The cuts, expected to hit mainly in Hong Kong and China, are part of a broader restructuring affecting around 13% of the firm’s bankers in the region, excluding Japan.
Sources close to the matter anticipate over 40 job losses in Hong Kong and mainland China alone, marking the deepest cuts in years for Morgan Stanley in its pivotal Chinese market. The move comes amidst a challenging economic landscape, with China grappling with a prolonged real estate crisis and lingering uncertainties about growth.
While Morgan Stanley’s global results exceeded expectations, Asia’s net revenue dipped by 12% to $1.74 billion in the first quarter, reflecting the region’s tough market conditions. Delayed last year in hopes of spurring voluntary departures due to low bonuses, the layoffs are now being initiated as revenue from China continues to slide. 
The broader context sees global financial giants trimming their sails amid a dearth of deals, exacerbated by fraying US-China relations and China’s crackdown on private enterprises and property woes. Stock sales by Chinese firms in the US and Hong Kong have hit a two-decade low, signaling turbulent times for investment banking.
Joining the ranks of firms like UBS Group and Bank of America, HSBC Holdings has also embarked on fresh job cuts, underlining the industry-wide belt-tightening trend. The belt has been cinched even tighter for senior investment bankers, with compensation hitting lows not seen in years.
Despite the headwinds, Morgan Stanley remains committed to expanding its footprint in China, securing key licenses and making strategic hires. Recent additions to its investment banking division signal a pivot towards talent acquisition and on-the-ground growth initiatives, underscoring the bank’s long-term commitment to the region amidst the storm.
