Wall Street is starting to trim jobs as economic uncertainties mount

Wall Street banks are starting to cut what could be thousands of workers as new economic uncertainties mount.

In recent weeks, Morgan Stanley (MS), Goldman Sachs (GS), and Bank of America (BAC) all began workforce reductions that affect various parts of their operations.

The layoffs come at a time of the year when it is common for Wall Street to cull some underperformers and trim staff as part of annual reviews.

The cuts also come at a time when hopes for an IPO bonanza and dealmaking boom in the first year of the new Trump era are being put to the test due to uncertainties surrounding the Trump administration’s trade policies.

Morgan Stanley is planning to cut around 2,000 workers by the end of the first quarter, according to a person familiar with the matter.

The reductions will affect front-office and back-office employees across all units. They won’t include Morgan Stanley’s army of 15,000 financial advisers, but the layoffs will affect some people working for the advisers in support functions.

The person familiar with the moves said they are part of the bank’s ongoing process of assessing its resource needs based on its business priorities, location strategy, and employee performance globally.

“It’s really about operational efficiency,” the person said, adding that “it doesn’t relate to market conditions.”

Goldman Sachs is planning cuts amounting to 3% to 5% of its workforce. Its headcount at the end of 2024 was 46,500.

The reductions are part of its annual trimming of underperformers.

“Like other banks, this is part of our normal, annual talent management process,” a Goldman Sachs spokesperson told Yahoo Finance, declining to discuss specifics.

The Wall Street Journal reported the culling will focus on vice presidents and that CEO David Solomon has told senior executives that in recent years the bank hired too many vice presidents relative to overall hiring.

At Bank of America, the company cut 150 junior investment bankers, the Wall Street Journal first reported on Monday.

The move comes weeks after a larger reduction as part of BofA’s annual review process, first reported by Reuters.

That reduction amounted to cutting 1% of staff across Bank of America’s global banking and markets divisions and included managing directors, directors, and vice presidents, according to a person familiar with the matter.

More cuts this year are also possible at Citigroup (C) since that bank is a little more than halfway through a two-year reduction plan that is part of a sweeping restructuring effort under CEO Jane Fraser.