The economic crisis continues as layoffs are slated early this year at Wall Street, including Goldman Sachs Group. The firm will start retrenching thousands of jobs across the organization from Wednesday, two sources familiar with the move said, as it prepares for a challenging economic environment in the year ahead.
It was reported that the job cuts are expected to be over 3,000, but the final number is yet to be determined. However, Goldman Sachs declined to comment.
Bloomberg News also reported on Sunday that Goldman would eliminate about 3,200 positions.
At the end of last year's third quarter, Goldman had 49,100 employees after adding significant staff during the coronavirus pandemic.
Institutional banks have suffered a significant corporate dealmaking slowdown due to the previous years' volatile global financial markets. Thus, the layoffs are likely to affect major divisions of banks, but with Goldman Sachs, the cut will affect the investment banking division.
Aside from that, hundreds of jobs are also likely to be reduced from the firm’s loss-making consumer business after it has scaled back plans for its direct-to-consumer unit, Marcus.
Last year, Chief Executive David Solomon sent a year-end voice memo warning the staff of a headcount reduction in the first half of January. However, Goldman Sachs remains silent regarding the directive.
The bank’s annual bonus payments are usually delivered in late January, but with the news of job cuts, it is expected to be down about 40% from the previous year.
Earlier, the bank restarted its annual job-cutting program in September, which had been on hold for two years during the pandemic.
Goldman Sachs is still considered the Wall Street giant, although it typically trims about 1%-5% of its staff yearly. The new cuts come on top of those layoffs.
The news of layoffs in the financial sector came after it was released that investment banking fees nearly halved in 2022, with $77 billion earned globally by the banks, down from $132.3 billion one year earlier, Dealogic data showed. These layoffs have affected accounting firms, as well as wealth and investment management companies like Goldman Sachs.