Wall Street banks forced to cut jobs due to slump in IPOs, debt securities and mergers

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Slump in IPOs, debt securities and mergers forces Wall Street to cut jobs significantly

New York (pte004/04.05.2023/06:15) –

The sharp drop in IPOs, debt securities and mergers is forcing major Wall Street banking institutions to make significant job cuts. After Bank of America and Citigroup it now also applies Morgan Stanley, where, according to insider sources, 3,000 jobs are to be eliminated by the end of June. If the areas of administration and financial advice are factored out, that’s almost five percent of the bank’s New York workforce who could soon be on the street.

“Downtrend longer than expected”

“A historic business boom sparked by the pandemic and a dramatic slump that began last year after the Federal Reserve hiked interest rates is putting the brakes on an overheating economy,” reports CNBC. A strong decline in IPOs, debt issuance and mergers, which were previously the pillars of Wall Street, is largely responsible for this. For example, IPO volume is now 74 percent lower than last year, according to recent data from Dealogic prove.

“The upcoming job cuts at Morgan Stanley confirm that Wall Street is struggling with high costs as the downtrend lasts longer than expected,” the experts emphasize. The US bank had already given notice to almost two percent of its employees in December of the previous year. “Last month, it also came under fire from analysts for spending higher costs while revenue fell in the first quarter,” the report said.

From Goldman Sachs to Citigroup

Overall, however, Morgan Stanley is not alone in its job cuts. It already hit in September last year Goldman Sachs, which had to announce a first round of layoffs among the workforce. Other major Wall Street institutions followed suit, and Goldman Sachs had even deeper layoffs in January. In the last few weeks, competitors such as Bank of America and Citigroup have finally reported that they each have to cut a few hundred jobs.

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