What Morgan Stanley Job Cuts Mean for Investment Bank Aspirants?

It’s been an unfortunate past few weeks given the layoffs announced by banks like Morgan Stanley, CS, and IT giants Meta & Twitter.

☑️ #Citigroup recently let go of 50 trading personnel as well as several banking staff members. #barclays and #goldmansachs trimmed hundreds of personnel. #creditsuisse will slash 2700 jobs by Q4 2022 and a total of 9000 jobs by 2025.

Declines in revenue and fewer deals made have seen banks take these drastic measures. According to analysts, 2023 may also be a rough year.

☑️ Taking Hong Kong as an example, the funds raised by IPOs this year are only US$10.7 billion, marking a more than 70% decrease from the previous year, the lowest record since 2017.

☑️ Morgan Stanley’s Q3 IBD revenue also dropped 55% compared to the previous performance. Hence CEO James Gorman announced layoffs following the October financial report release. Their internal documents further indicate that the list of layoffs in the Asia-Pacific region has been drawn up, especially for those in China. The reasons are not difficult to estimate. China’s position on dynamic clearing is firm, economic activities are limited, and growth is not clear in the short term, similar to the Goldman Sachs layoff woes. MS is also planning to cut the Technology investment team in the Asia-Pacific region.

As one of the few foreign investment banks that have developed rapidly in the Chinese capital market in the past ten years, Morgan Stanley has a big headcount which requires more meticulous strategic planning given China’s difficult to predict policies. Thus investment banks may reasonably decide to reduce their business in China at least temporarily. Students should keep this in mind when applying for division interviews.

✅ Hence, if you want to target investment banking roles, product and deal knowledge will not be enough for preparation. You’ll need to evaluate such factors and Chinese situation better to strategically plan your job applications.

Although the MS 2022/23 recruitment is almost closed for registration, there are still some recruitments on rolling basis programs that students can monitor and apply for.

This would also be a good time for students to re-assess application strategy instead of focusing on #investmentbanking roles only. The venture capital and private equity outlook for 2023 also is also expected to stay tepid.

✅ Adopting a more diversified approach can help to increase your chances of landing offers despite the tough market conditions.

✅ Exploring roles in advisory and even corporate/ commercial banking can help you.

👉Leverage the skills and experience you've developed similar to what IB demands

👉 Get your 'foot in the door' with target banks

👉 Create a safety net to still gain hands-on experience that you can pivot to other roles later, so you don't risk wasting a precious year

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