Morgan Stanley has cut approximately 2% of jobs from its operations across the globe, CNBC has reported citing people familiar with the development.

The layoff has affected roughly 1,600 employees of the investment banking giant, which employs 81,567 people globally, the unnamed sources said.

With the move, the bank has joined its rivals such as Goldman Sachs, Citigroup and Barclays, who have revived the practice of firing their underperforming staffs annually.

As part of the practice, which was stalled during the Covid-19 pandemic, the Wall Street banks usually axe 1% to 5% of the employees ahead of the bonus season.

The practice was halted as deals activities flourished for two years post the pandemic. However, the deals mostly came to a standstill this year after the Federal Reserve raised its interest rates.  

Morgan Stanley’s latest job cuts will exclude financial advisors and a few other units, added the people.

The exemption could be driven by revenue generating nature of the business that handles client assets.

A company spokesman refused to give any updates on the development.

In the last few years, Morgan Stanley and its counterparts have witnessed an increase in their staffs.

Morgan Stanley’s staff ranks rose by 34% from the first quarter of 2020 to Q3 2022.

Last week, the banks’ CEO James Gorman told Reuters that its was preparing for ‘modest cuts’ without giving any further details.

Earlier last month, the agency also reported about Morgan Stanley’s plan to reduce the size of its headcounts globally amid a decline in its dealmaking business.