Morgan Stanley (NYSE:MS) plans to trim its Wealth Management unit workforce by laying off about 1% of employees as part of a cost-cutting move, the Wall Street Journal reported. The job cuts are expected to focus on eliminating overlapping positions, particularly those resulting from the E*Trade acquisition (closed in 2020).
The performance of MS’ Wealth division, which contributed about 49% of total revenues in 2023, is facing a slowdown. In the fourth quarter of 2023, the segment reported flat revenues from the year-ago quarter, with net new assets falling by 8%.
It is worth highlighting that other financial companies, including Citigroup (C), are implementing similar measures. This is in response to growing concerns about the timing of interest rate cuts by the U.S. Federal Reserve and the weak investment banking scenario.
Is MS Stock a Good Buy?
In a bid to bolster its Wealth Management business, Morgan Stanley is actively deploying artificial intelligence (AI) solutions. These initiatives, including the development of an AI chatbot, should help increase client engagement, improve operational efficiency, and boost revenue growth.
Overall, Morgan Stanley stock sports a Moderate Buy consensus rating on TipRanks, reflecting nine Buy and 11 Hold recommendations. Analysts’ average price target of $96.68 implies 15.1% upside potential from current levels. MS stock has gained 6.5% over the past three months.
