According to sources on Friday, Goldman Sachs could lay off up to 8% of its workforce, or roughly 4,000 employees, as the financial titan prepares for weak global growth in 2023.
According to sources in Semafor and CNBC, the employment cuts are scheduled to begin in early 2023, with the final percentage perhaps being less than 8%.
Goldman Sachs routinely cuts one to five percent of its employees each year, focusing on underperforming employees.
A person familiar with the subject told AFP that this year’s culling will be more severe than normal due to the uncertain economic outlook and the expansion in Goldman’s employment in previous years.
Goldman’s workforce was 49,100 at the end of October, up over 30% from the end of 2019 due to hiring campaigns and acquisitions.
The move comes as Goldman Sachs and other investment banks report a significant reduction in fees related to initial public offerings and a bleak outlook for merger and acquisition advising in 2023 owing to economic uncertainty.
Goldman Sachs Chief Executive David Solomon stated last week at a banking conference that capital markets activity had been weaker than expected, with clients “reducing risk down” following a tumultuous year.
“At the same time, we continue to see headwinds on our expense lines, especially in the near term,” Solomon said. “Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set that we see in front of us.”
Goldman Sachs may restructure according to Bloomberg
Along with underperformers, those most vulnerable to layoffs are in Goldman’s much-maligned consumer-banking unit, Marcus. The consumer bank is being divided, as indicated by Goldman Sachs in October restructure, and the platform will no longer offer personal loans, according to Bloomberg and the Financial Times this week. Marcus was at the center of many of the 400 cutbacks mentioned previously.
Solomon perhaps telegraphed staff-cut intentions last week at a conference. “We’ve set in motion certain expense mitigation plans, but it will take some time to realize the benefits,” he said, according to the Financial Times. “Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set.”