HONG KONG, March 6 (Reuters) – Morgan Stanley (MS.N), opens new tab has laid off about 9% of its staff at its asset management business unit in China, two people with direct knowledge of the matter said, as the country’s spiralling stock market dampens prospects for its $3.8 trillion fund sector.
Morgan Stanley Investment Management China started reducing headcount in December and the move has impacted about 15 employees, the people said on condition of anonymity as they were not authorised to speak to the media.
This would be the first time Morgan Stanley has cut staff at the China fund unit since it bought out its local partner’s 36% stake in the loss-making business for about $54 million in 2023. It rebranded the unit as a wholly owned subsidiary in June.
Morgan Stanley declined to comment.
The downsizing underscores the challenges that global financial firms, including JPMorgan (JPM.N), opens new tab and BlackRock (BLK.N), opens new tab, face in the world’s second-biggest economy as a protracted economic malaise batters markets there.
China’s blue-chip CSI300 index (.CSI300), opens new tab sank to five-year lows last month, after having lost 11% in 2023, pummelled by an unprecedented debt crisis in the property sector and a lack of large-scale government stimulus.
The weakening of the Chinese market has hit local investors’ appetite, resulting in massive redemptions from actively managed equities funds.
The job cuts by Morgan Stanley in the China fund unit adds to the dour outlook for other China-focused jobs in the financial sector including investment banking.
