(Bloomberg) -- Morgan Stanley plans to start cutting about 50 investment-banking jobs in the Asia-Pacific region this week, with at least 80% of the reductions in Hong Kong and China, people familiar with the matter said.

The planned cuts affect about 13% of the 400 bankers in the region, excluding Japan, one of the people said. More than 40 people in Hong Kong and mainland China are expected to lose their jobs in the coming round, the people said, asking not to be identified discussing private information.

The final size and timing of the cuts may change, the people said. A media representative for the New York-based bank declined to comment.

The job cuts would be the deepest in years for Morgan Stanley in China, its biggest market in the region. The world’s second-biggest economy is struggling to find a firm footing due to a prolonged real estate crisis and persistent doubts over growth. 

Morgan Stanley reported Tuesday that net revenue from Asia fell 12% to $1.74 billion in the first quarter from a year earlier, even as its global results topped forecasts. Earnings for the quarter totaled $3.4 billion, on $15.1 billion in revenue, lifted by trading. 

The firm delayed the layoffs late last year, betting that historically low bonuses for dealmakers would spark voluntary departures, one of the people said. Only a few bankers left, prompting the company to make deeper cuts as revenue from China continues to slide. The bank plans to start communicating with the affected employees this week, the people said. 

Global financial firms are seeking to reduce expenses amid a deal drought, and have been cutting investment-banking staff in Asia amid deteriorating US-China relations, along with a crackdown on private enterprise and a property crisis. 

Stock sales by Chinese firms in the US and Hong Kong plummeted to a two-decade low of $1.7 billion in the first quarter, about 30% of the volume in the same period last year, and just 4.3% of the level seen in the 2021 peak, data compiled by Bloomberg show.  

HSBC Holdings Plc on Tuesday started a new round of reductions of about a dozen bankers, joining UBS Group AG and Bank of America Corp., which cut jobs earlier this year. Goldman Sachs Group Inc., Citigroup Inc. and JPMorgan Chase & Co. have made unprecedented rounds of job cuts in the past two years in Asia. 

Pay for most senior investment bankers at Wall Street firms in Asia dropped to the lowest level in almost two decades last year, with total compensation for many dipping below the $1 million or more they typically earn. At least 20% of managing directors at banks, including Morgan Stanley and UBS, received no bonuses, Bloomberg reported in January.

Read more: Goldman, Citigroup Begin Cutting About 35 Dealmakers Across Asia

Morgan Stanley last year reduced its investment-banking head count in the region by about 7%, with China-focused bankers taking the biggest hit, following major cuts in 2022.

Still, Morgan Stanley is gradually building its onshore China business. It won approval for principal trading and research licenses last month, after obtaining the go-ahead to set up a futures company and take full ownership of its fund management business last year. 

Read more: Morgan Stanley Hires Huang for China Asset Management Drive

The bank also made some senior hires for its investment-banking division this year, including Michael Ginzburg from Goldman Sachs in Australia, and ex-Credit Suisse banker Seiwon Kim in Korea. Min Huang, formerly with the Swiss bank, joined this month to lead its investment management business for Greater China.

--With assistance from Joyce Koh and Pei Li.

(Updates with total earnings in fifth paragraph.)

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