Banking giant Goldman Sachs is preparing to terminate hundreds of staff as early as next week as a recession threatens the US economy. According to reports, the layoffs will signal the return of a yearly tradition that was interrupted the previous two years owing to the pandemic.
Without any layoffs, the company’s workforce grew to over 47,000 internationally at the end of June, according to data that is currently accessible. This is a 15% growth from the same time last year.
The move will result in the loss of 500 to 2,400 workers
By the next week, experts predict that Goldman Sachs would fire one to five percent of its underperforming staff. This will result in the loss of 500 to 2,400 workers.
Denis Coleman, the Chief Financial Officer, warned in July that the company would reduce spending and restrict hiring.
“Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans to ensure the best use of our resources,” said Coleman.
“Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward, though these actions will take some time to be reflected in our results,” he added.
Coleman claimed that the company had to make difficult changes as a result of a 48% decline in quarterly earnings.
Goldman Sachs is expected to bring back its annual performance review program for its employees
It is important to highlight that the decision was influenced by unstable macroeconomic conditions, an uneasy geopolitical environment brought on by the war in Ukraine and Russia, and extremely high inflation.
In addition to its yearly custom of reducing the number of employees, Goldman Sachs is expected to bring back its annual performance review program for its employees by the end of this year,
Other Wall Street financial giants, including Citigroup, JPMorgan Chase & Co., and Wells Fargo & Co., have in the past also canceled employee contracts as a result of downsizing.