Episode summary
Morgan Stanley Cuts Jobs Across All of Its Business Lines | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Isabelle Lee · Guests: Herman Chan, Kunjan Sobhani, Mandeep Singh, Jennifer Bartashus
Summary
Morgan Stanley’s cut of about 3% of its global workforce was framed as a broad annual culling rather than a sign of acute weakness, with the analyst noting that the bank had grown headcount 3% last year and is now moving back in line with peers. The discussion also tied bank staffing decisions to AI, with the view that automation is already reducing the need for headcount in investment banking and consumer operations, even if it is not yet driving extreme job cuts. Regulatory easing under the Trump administration was described as helping bank M&A close faster and giving large banks more capital flexibility for trading and lending.
Broadcom’s results drew a more bullish reaction, especially its call for more than $100 billion in AI chip revenue by 2027 and continued growth in 2028. The analyst said that forecast is credible because hyperscaler spending, custom accelerator demand, and Broadcom’s networking business all look stronger than expected. Nvidia’s upcoming investor day was portrayed as a key 2027 roadmap event, while chip replacement cycles were said to be longer than many assume.
The episode also covered Anthropic’s resumed Pentagon talks and the possibility of a compromise over AI guardrails, plus Kroger and BJ’s Wholesale, where the retail analyst said consumers are still trading down, private label is gaining, and warehouse clubs continue to take share.
Key takeaways
- Morgan Stanley’s 3% reduction was described as an annual culling, not a broad stress signal, and the bank still expects to compete well in 2026.
- AI is already helping banks cut costs and improve customer targeting, especially in call centers and marketing, according to the analyst.
- Broadcom’s call for more than $100 billion in AI chip revenue by 2027 was presented as credible because hyperscaler demand and networking strength remain solid.
- The analyst said Anthropic likely needs a workaround with the Pentagon to avoid being labeled a supply chain risk.
- Kroger is benefiting from a value-focused reset under Greg Foran, while BJ’s is gaining share by expanding into new high-growth markets.
Notable quotes
“I would say that it it is sort of an annual calling. They they did a similar uh workforce reduction last year”
“it was one of the most strongest showings when it comes to AI chip names in our sector”
“So um I wouldn't think they would be throwing out numbers willy-nilly if they didn't have to”
“I do think uh they'll find a solution and uh that should somewhat insulate them from losing any business”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcast or watch us live on YouTube. One of the top red stories on the Bloomer terminal is about Morgan Stanley and cutting about 3% of its workforce pretty much across all of its business lines.
And one question I have I think a lot of folks have is this something specific to Morgan Stanley. Does it signal weakness in the biz or is it just kind of the annual culling of people? So let's just see what's happening here.
Herman Chan, senior analyst for US Banks joins us here in our Bloomberg interactive broker studio. So what do you make of the news Herman coming out of Morgan Stanley about laying off about 3% of its workforce?
Yeah, that's right. 3% of its workforce. Um about 200 workers um I would say that it it is sort of an annual calling.
They they did a similar uh workforce reduction last year. I would also point to the fact that headcount across the big banks was pretty stable um for banks like JP Morgan, Bank of America, uh City uh whereas Morgan Stanley grew their headcount 3% last year. So um now they're sort of back in the pack with this workforce reduction.
So we noticed that the cuts hit investment banking, trading and the wealth management. You mentioned that it's annual culling. But should we read into whether this signals a broader shift for the bank?
Yeah, it's interesting because last year when they did a 2% reduction, they didn't really touch their financial advisor force whereas this year it seems like that it's more broad in scope.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- bank job cuts
- ai chip demand forecast
- ai military model deployment
- retail earnings
- semiconductor earnings
Companies and tickers mentioned
- MS
- AVGO
- NVDA
- KR
- BJ
- Morgan Stanley
- Broadcom
- Nvidia
- Anthropic
- Kroger
- BJ's Wholesale
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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