Bank sacks 2,500 staff despite record profits: Is AI behind the job cuts?

New Delhi (The Uttam Hindu): Morgan Stanley, a leading US investment banking firm, has laid off approximately 2,500 people from its global workforce. This number represents approximately 3 percent of the company's total workforce. According to media reports, the layoffs began in early March.

According to a report in the Wall Street Journal, the layoffs are not due to any improvement process related to Artificial Intelligence (AI), but are being attributed to the company's changing business priorities, new location strategy globally and employee performance reviews.

The layoffs are being implemented across the bank's three major divisions—Institutional Securities, Wealth Management, and Investment Management—and affect front-office, revenue-related, and back-office roles, though financial advisors are excluded, the report said.

Morgan Stanley has not yet officially commented on the report. Last spring, the company laid off approximately 2,000 employees.

Interestingly, these layoffs come at a time when the company projects record annual revenue of $70.6 billion in 2025. Revenue saw a sharp 47 percent increase in the final quarter of the year. As of December 31, 2025, the company had a total of 82,992 employees in more than 40 countries.

In a recent report, Morgan Stanley stated that the long-term impact of AI on jobs may not be as severe as many believe. According to the company, some jobs will be automated, but most workers will not be completely unemployed. Many people may shift to new types of jobs, some of which don't even exist yet. The bank believes that AI will change the way work is done, but will not eliminate jobs entirely.

Meanwhile, Block, the payments company founded by Jack Dorsey, recently announced plans to cut its workforce by nearly half due to AI-related changes. The company plans to reduce its workforce from 10,000 to around 6,000.

Many tech industry experts believe that most computer-based white-collar jobs could move toward automation in the next 12 to 18 months.

According to reports, Amazon has also cut staff in its robotics division, affecting at least 100 white-collar jobs. The company previously cut nearly 16,000 jobs in January.

At the same time, American tech company Oracle is also planning to lay off 20,000 to 30,000 employees to increase its AI data center capacity.