NEW YORK CITY (VINnews) – Morgan Stanley plans to lay off about 3% of its workforce, affecting roughly 2,500 employees across its investment banking and trading, wealth management, and investment management divisions, according to sources familiar with the matter.

The reductions, expected to begin in the coming weeks, come amid a broader slowdown in dealmaking and market volatility that has pressured Wall Street firms to trim costs. Morgan Stanley, one of the largest U.S. investment banks, employs approximately 80,000 people globally.

A spokesperson for the New York-based firm declined to comment on the specifics but said in a statement that the company regularly reviews its staffing levels to align with business needs.

The layoffs mark the latest in a series of cuts across the financial sector, as banks grapple with rising interest rates, geopolitical uncertainties and a sluggish economy. Rivals such as Goldman Sachs and Citigroup have announced similar reductions in recent months.

Shares of Morgan Stanley, traded under the ticker $MS, fell 1.2% in afternoon trading on the New York Stock Exchange following the news.

Analysts say the moves reflect a shift toward efficiency, with firms increasingly relying on technology and automation to handle routine tasks.

Employees impacted by the layoffs will receive severance packages and outplacement services, the sources said.

Morgan Stanley’s wealth management unit, a key growth driver, has been a bright spot, but even there, margins have come under pressure from higher funding costs.

The firm reported strong fourth-quarter earnings in January, but executives warned of headwinds in investment banking fees.

This story will be updated as more details become available.