- Goldman Sachs plans to slash 3,200 jobs this week as the investment bank braces for economic headwinds, Bloomberg reported Sunday, citing a person with knowledge of the matter.
- More than one-third of the cuts will be from within the bank’s core trading and banking units, the source told the wire service.
- Goldman is expected soon to report financials related to a new unit that houses the bank’s credit card and installment-lending business, which will record more than $2 billion in pretax losses, sources told Bloomberg.
Goldman declined to comment on the reported cuts, but a source within the bank confirmed to Banking Dive the round of cuts will not exceed 3,200.
That figure is lower than the 4,000-employee ceiling Semafor and other news outlets reported in December. Managers across the bank reportedly had been asked to identify low performers for a cull that could cut loose as much as 8% of its staff. Goldman said as early as July that it would slow hiring and reinstate annual reviews in perhaps the first indicator that layoffs were coming.
The layoffs, set to begin around midweek and following a cost review, come amid a revamp to Goldman’s structure, announced in October, that includes splitting its consumer bank Marcus and halting personal loans on the platform.
The cuts include non-front-office roles that the investment bank added to its divisional headcount in recent years, Bloomberg reported.
Since the start of the COVID-19 pandemic, Goldman added staff at roughly twice the pace of the banking industry writ large, Wells Fargo analyst Mike Mayo said, according to the Financial Times.
Headcount jumped by 20% between the first quarter of 2020 and the third quarter of 2022, Mayo said.
Meanwhile, analysts have estimated Goldman’s adjusted annual profit could drop 46%, according to Bloomberg.
“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” Goldman Sachs CEO David Solomon said in a year-end voicemail message to staff. “For our leadership team, the focus is on preparing the firm to weather these headwinds.”
Despite the upcoming cuts, Goldman still plans to continue hiring, including inducting its regular analyst class this year, Bloomberg reported Sunday.
The bank is also considering reducing the bonus pool for traders by a low double-digit percentage, Bloomberg reported in November.
“We need to proceed with caution and manage our resources wisely,” Solomon said last month, emphasizing that the bank is “conducting a careful review” and that “discussions are still ongoing.”