(Reuters) - Wall Street heavyweight Morgan Stanley (MS.N)
is planning to lay off about 2,000 employees later this month, a person familiar with the matter told Reuters on Tuesday.
The reduction of 2% to 3% of the company's workforce, excluding financial advisers, was aimed at improving operational efficiency, the person said, requesting anonymity.
Morgan Stanley had more than 80,000 employees worldwide at the end of 2024. The layoffs were not related to current market conditions, the source said.
The bank's move follows a string of job cuts by Wall Street lenders in recent weeks as they prepare for an uncertain economic environment, especially after President Donald Trump's newly announced tariffs against trading partners.
Rival Goldman Sachs (GS.N) has brought forward its annual performance review process and plans to trim its staffing by 3% to 5%.
Bank of America (BAC.N) and has eliminated 150 junior banker roles in its investment banking arm, Reuters reported earlier this month.
Bloomberg News first reported the development at Morgan Stanley earlier in the day.
Some of the upcoming job cuts at the lender are tied to performance, while others are the result of changes to locations where the bank bases some of its workers, Bloomberg News reported.
Bankers had expected a robust rebound in capital markets this year after Trump's election, but that optimism has so far failed to translate into activity as clients grapple with the president's ever-changing tariff threats.
Morgan Stanley Co-President Daniel Simkowitz said at a conference on Tuesday that new equity issues and mergers and acquisitions are "certainly a bit on pause, or the bar is high because of some of the policy uncertainties".
Still, the bank was adding "real headcount" at senior levels of its investment banking arm, Simkowitz said.
The Federal Aviation Administration is reinstating 132 employees who were fired on February 14 after a federal judge in Maryland ordered their return, a union said on Monday.
The Professional Aviation Safety Specialists union said the probationary employees who were fired as part of the Elon Musk-led Department of Government Efficiency federal government cuts will receive back pay and should return to duty status on March 20.
"This is a win for public safety and for a critical workforce dedicated to the FAA’s mission," union President David Spero said.
Transportation Secretary Sean Duffy said last month that the FAA cut 352 probationary employees out of about 45,000 total, but said none were in "safety critical" positions.
The FAA did not immediately respond to a request for comment. The U.S. Transportation Department cut hundreds of other probationary workers across other agencies.
The firings raised alarm after a series of plane crashes have sparked concern about U.S. aviation safety.
U.S. District Judge James Bredar in Baltimore directed the administration to reinstate tens of thousands of federal workers, saying 18 agencies that fired probationary employees en masse violated regulations governing the process for laying off federal workers. The government had claimed it fired individual workers for performance reasons.
"There were no individualized assessments of employees. They were all just fired," Bredar said.
The union said those who were fired in February included technical operations, mission support services, air traffic services and flight standards service.
"Haphazardly eliminating positions and encouraging resignations creates a demoralizing effect on the workforce," Spero said. "We are pleased that the expungement of these letters referencing the false performance claims allows these employees to continue their service to the American flying public without this unsubstantiated blemish on their work record."
The Trump administration sent air traffic controllers buyout offers but later said they were not eligible, also declaring other safety officials, including Transportation Security Administration officers, ineligible.
The FAA remains about 3,500 controllers short of targeted staffing levels and in many places controllers are working mandatory overtime and six-day weeks
Duffy has announced plans to boost hiring.
"The FAA is already short 800 technicians and these firings inject unnecessary risk into the airspace in the aftermath of four deadly crashes in the last month," U.S. Senator Maria Cantwell, a Democrat from Washington, said last month.
President Donald Trump's administration in court filings has for the first time acknowledged it fired nearly 25,000 recently hired workers, and said federal agencies were working to bring all of them back after a judge ruled their terminations were likely illegal.
The filings made in Baltimore, Maryland, federal court late Monday included statements from officials at 18 agencies, all of whom said the reinstated probationary workers were being placed on administrative leave at least temporarily.
The mass firings, part of Trump'sbroader purge of the federal workforce, were widely reported, but the court filings are the administration's first full accounting of the terminations.
Most of the agencies said they had fired a few hundred workers. The Treasury Department terminated about 7,600 people, the Department of Agriculture about 5,700 and the Department of Health and Human Services more than 3,200, according to the filings.
On March 13, U.S. District Judge James Bredar said the mass firings of probationary workers that began last month were illegal, and ordered the workers reinstated pending further litigation.
The ruling did not block the agencies from firing workers but took issue with how the mass firings were conducted. The court said agencies should have followed rules for conducting mass layoffs.
Probationary workers typically have less than one year of service in their current roles, though some are longtime federal employees.
Bredar, in a brief order on Tuesday, said it appeared the agencies "have made meaningful progress toward compliance" with his ruling. He ordered the agencies to update him on progress in reinstating workers by Monday afternoon, and said he expected "substantial compliance."
Bredar's ruling came in a lawsuit by 19 Democrat-led states and Washington, D.C., who said the mass firings would trigger a spike in unemployment claims and greater demand for social services provided by states.
The office of Maryland Attorney General Anthony Brown, which is spearheading the lawsuit, said it was reviewing the filings.
The Trump administration has appealed Bredar's decision and on Monday asked a Richmond, Virginia-based appeals court to pause the ruling pending the outcome of the case.
Former probationary workers at the Departments of Agriculture and Health and Human Services, the Internal Revenue Service, and the General Services Administration told Reuters they had received emails saying they were being reinstated on full pay, but placed on administrative leave.
One probationary worker who had been reinstated at the GSA, which oversees government real estate, said he still expects to be ultimately fired, but being back on pay and benefits is a short-term reprieve. "My family has health insurance and gives me a little bit of runway to find what's next," he said.
SAN FRANCISCO RULING
Hours before Bredar issued his March 13 ruling, a federal judge in San Francisco had ordered that probationary workers be reinstated at six agencies, including five also covered by Bredar's order and the U.S. Department of Defense. The administration has also appealed that decision.
That judge, U.S. District Judge William Alsup, in an order on Monday criticized the administration's decision to place probationary employees on administrative leave rather than send them back to work. He said that did not comply with his order to reinstate the workers because it would not restore the government services his order intended.
The U.S. Department of Justice, in a filing in response to Alsup on Tuesday, said placing workers on leave was the first in a series of steps toward fully reinstating them and "administrative leave is not being used to skirt the requirement of reinstatement."
In the filings in Baltimore late Monday, agency officials said they had either reinstated all of the fired employees or were working to do so. They said bringing back large numbers of workers had caused confusion and turmoil.
The officials also noted that an appeals court ruling reversing Bredar's order would allow agencies to again fire the workers, subjecting them to multiple changes in their employment status in a matter of weeks.
"The tremendous uncertainty associated with this confusion and these administrative burdens impede supervisors from appropriately managing their workforce," Mark Green, deputy assistant secretary at the U.S. Department of the Interior, wrote in one of the filings. "Work schedules and assignments are effectively being tied to hearing and briefing schedules set by the courts."
Bredar has scheduled a hearing for March 26 on whether to keep his ruling in place pending the outcome of the lawsuit, which could take months or longer to resolve.
Siemens (SIEGn.DE) that will cut 5,600 jobs at its Digital Industries business, the engineering company said on Tuesday, in the latest blow for German industry shaken by weak demand at home and abroad.
The job cuts amount to a little more than 8% of the 68,000 people employed in Digital Industries globally, and come as Siemens adjusts its production capacity in line with weak market conditions in Germany and China.
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It is the biggest number of layoffs announced by Siemens since 2017, with 2,600 of the jobs being axed in Germany, although Siemens said it was still committed to its home country as a business location.
Until recently Digital Industries had been the jewel in Siemens's crown, with the highest margins in the group for its controllers and factory software.
But Siemens, which employs 312,000 globally, said "muted demand primarily in the key markets of China and Germany coupled with increased competitive pressures have considerably reduced orders and revenue in the industrial automation business" over the last two years.
The job cuts were first flagged by Siemens last November, while in its latest quarter, Siemens' profit in digital industries fell by a third.
The news of the layoffs follows Volkswagen's Audi (VOWG.DE) on Monday saying it was cutting 7,500 jobs in administration.
Volkswagen itself has also unleashed a cost-cutting program involving 35,000 job cuts, while Porsche (P911_p.DE) plans to cut 3,900 jobs.
Siemens also on Tuesday said it was cutting 450 jobs at its electric vehicle charging business, a third of the total workforce.
Managing board member Cedrik Neike defended the job cuts, saying Siemens' automation business had to become faster and more agile.
"We need to become more regionally balanced and gain a broader customer base," he told German newspaper Handelsblatt.
Siemens must grow more strongly in other Asian markets such as India and in the United States, and become more active in sectors such as the aerospace and defence industry as well as the process industry, Neike said.
German trades union IG Metall said the decision shattered the trust of employees who were working to transform Siemens into a tech company.
"Transformation is not achieved through downsizing, but through positive change, above all by primarily further development and training," said Juergen Kerner, vice chairman of IG Metall and a member of Siemens' supervisory board.