Morgan Stanley has cut about 3% of its workforce, or roughly 2,500 employees, despite a record year for revenue.
The job cuts were across the bank's three major divisions: investment banking and trading, wealth management, and investment management.
The layoffs are based on strategy and individual performance, and the bank intends to add headcount in other areas.
Morgan Stanley had 82,992 employees as of December 31, 2025.
The layoffs come against the backdrop of a record year for revenues for the US-based investment bank.
It also beat Wall Street estimates for fourth-quarter profit in January, fueled by a 47% jump in investment banking revenue as dealmaking surged and debt underwriting fees nearly doubled.
Banking executives had struck an optimistic tone for 2026 on the back of healthy pipelines for M&A deals as well as IPOs.
Meanwhile, volatile markets amid worries of AI disruption to legacy technology businesses and geopolitical turmoil continue to boost trading desks as clients reposition portfolios to hedge against risks.
There have been massive layoffs across US companies since the start of this year, as they streamline operations amid rising adoption of AI tools.
