Goldman Sachs to cut about 3,200 jobs this week: Report

Goldman Sachs will lay off over thousands of people from Wednesday, as per a Bloomberg report. According to sources cited in the report, the number of jobs cut will not go over 3,200. Over a third of the job cuts will likely be from the company’s core trading and banking units. According to a Reuters report, hundreds of jobs could also be cut from Goldman Sachs’ loss-making consumer business. The investment bank had earlier scaled back plans for Marcus, its direct-to-consumer unit. This will be one of the company’s biggest round of layoffs. The last major such exercise had occurred in 2008 after the Lehman Brothers collapse, with Goldman Sachs firing nearly 10 percent of its workforce at that time. A spokesperson for the global investment firm has declined to comment on the report.

The decision comes a week before Goldman Sachs’ traditional year-end compensation discussions. The uncertain economic outlook means that even those who remain may see a drop in their compensation figures.

The Bloomberg report has stated that Goldman Sachs has plans to continue hiring later this year. The uncertain outlook for markets and the economy, fears of persistent inflation, an expensive consumer banking foray and slowdown in various business lines has prompted Goldman Sachs to undertake this move. The scale of layoffs is also compounded by the bank’s mistakes in the retail banking foray.

Under Chief Executive Officer David Solomon, Goldman Sachs’ headcount has surged 34 percent since the end of 2018. The headcount was more than 49,000, as of 30 September 2022. The firm had mostly decided to set aside its annual firing of underperformers during the pandemic, another decision that will affect the layoffs this year.

Goldman Sachs is also “poised to unveil financials tied to a new unit that houses its credit card and installment-lending business, which will record more than $2 billion in pretax losses”, as per the report.

The company has seen a 46 percent slide in profits on about $48 billion of revenue. But the trading division of the bank is expected to post another jump as per analysts, leading the firm to notch its second-best performance on record.

Amid the global slowdown, Goldman Sachs is not the only company to have considered layoffs in the past few months. Amazon had earlier announced that it would cut about 18,000 jobs starting this month. Meta and Twitter have also reduced their workforce in recent months.

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