Goldman Sachs (GS) is preparing to downsize in the coming weeks, chief executive David Solomon told staff in a year-end audio message.
The head of Wall Street’s leading investment bank told employees it was carrying out a workforce review at the company and having discussions about layoffs likely to take place in the first half of January, Bloomberg reported Wednesday.
Goldman Sachs declined to comment.
“There are a variety of factors impacting the business landscape, including tighter monetary conditions that are slowing economic activity,” Solomon was quoted as saying. “For our leadership team, the focus is on preparing the business for these headwinds.”
Bloomberg also reported that senior executives were asked to identify potential cost-cutting targets and that a final tally of job cuts had not been determined.
Earlier this month, Semafor reported Goldman planned to cut up to 8% of its workforce, or around 4,000 jobs.
The bank employed 49,100 people at the end of the third quarter, according to a regulatory filingup from 43,000 in the same period last year following an increase in hiring throughout 2021 as trading activity soared after the peak of the pandemic.
The talks of layoffs come after a substantial slowdown in bank profits this year as market volatility slashed income at investment banks – and as many firms cut labor costs to reduce in anticipation of a possible recession.
At the Wall Street Journal CEO Council Summit earlier this month, Solomon acknowledged the banking industry’s aggressive hiring last year and in 2020 he maintained record deal activity during the period.
“It’s a natural phenomenon so you have to cut back in certain areas and step back, and so we’re thinking about how we’re going to do that,” Solomon said. “But of course we will have to reduce our footprint a bit.”
In an earnings call earlier this year, Goldman Sachs said it would restore annual performance reviews have been halted during the pandemic, a strategy that has historically served to weed out laggards — in addition to slowing hiring. A reduction of up to 8% would go beyond its typical annual underperforming cull.
Financial industry peers have also discussed or announced layoffs. Morgan StanleyMRS) has would have cut about 2% of its workforce this month, while Citigroup (VS) also fired some workers, although the latter noted that this was only a usually annual call.
@JP MorganJPM) and Bank of America (BAC) took a more cautious approach to potential job cuts.
“You have to be very careful when you have a bit of a downturn to start cutting bankers here and there because you’re hurting the possibility of growth going forward,” said Daniel Pinto, president and chief operating officer of JPMorgan. said at an investor conference in September.
Bank of America CEO Brian Moynihan told a conference earlier this month that his institution don’t fire people but rather let natural attrition occur and let vacancies remain vacant, or fill them internally.
—
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
Click here for the latest stock market trends from the Yahoo Finance platform
Click here for the latest stock market news and in-depth analysis, including events moving stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app to Apple or android
Follow Yahoo Finance on Twitter, Facebook, instagram, Flipboard, LinkedInand Youtube
0 Comments