edited by: Mohammad Haris
Last Update: December 29, 2022, 11:19 AM IST
Goldman Sachs had 49,100 employees at the end of the third quarter. (Photo: shutterstock)
Goldman Sachs may lay off 8 percent of its workforce, or up to 4,000, to stem the fall in profit and revenue
Goldman Sachs Group is planning a new round of job cuts, to be unveiled in a few weeks Bloomberg The report quoted Chief Executive Officer David Solomon’s traditional year-end message to employees.
“We are conducting a careful review and while discussions are still ongoing, we anticipate reducing our workforce in the first half of January… There are a number of factors affecting the business landscape, including economic These include tightening monetary conditions slowing activity. .. For our leadership team, the focus is on preparing the firm to weather these headwinds,” Solomon said in the message, according to the report.
People with knowledge of the matter said earlier this month that Goldman Sachs could cut 8 percent of its workforce, or up to 4,000 jobs, to stem the decline in profit and revenue.
The company had 49,100 employees at the end of the third quarter after adding a significant number of employees during the pandemic. Its headcount will remain above pre-pandemic levels, the source said. According to a filing, the workforce stood at 38,300 at the end of 2019.
“We need to proceed with caution and manage our resources wisely,” Solomon said in his message.
As per earlier reports, the bank is also drastically cutting the annual bonus pool this year. This is in stark contrast to the 40-50 per cent growth projected for top-performing investment bankers in 2021.
The bank also indicated in October toning down its ambitions for loss-making consumer unit Marcus. According to earlier reports, Goldman is also planning to spin off unsecured consumer loans.
Trading and investment banking — the traditional drivers of Goldman’s profit — accounted for about 65 percent of its revenue at the end of the third quarter, compared with 59 percent in the third quarter of 2018, when Solomon took the top job.
In July, the investment bank warned it could slow hiring and cut spending as the economic outlook worsened. It reported a 48 per cent decline in quarterly profit, which beat forecasts due to gains in fixed income and commodities trading.
Goldman’s profit decline came almost entirely from global economic uncertainty and a slowdown in deal-making at most banks. Investment banking revenue was down 41 percent from a year earlier, as fees for taking companies public and helping them issue fresh debt nearly evaporated in the quarter.
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