Facing the axe: People walk through the lobby of the Goldman Sachs headquarters in Manhattan, New York City. The global investment bank says it plans on cutting up to 8% of its employees as world economies and markets continue to struggle with inflation. — AFP
NEW YORK: Goldman Sachs Group will begin laying off thousands of employees tomorrow, according to two sources familiar with the matter, as the firm prepares for a difficult economic environment.
The job cuts are expected to be just over 3,000, one of the sources said, but the final number is yet to be determined.
The sources could not be named because the information was not yet public. Goldman Sachs declined to comment.
Bloomberg News reported on Sunday that Goldman would eliminate about 3,200 positions. Goldman had 49,100 employees at the end of the third quarter, after adding significant numbers of staff during the coronavirus pandemic.
One of the sources said the layoffs are likely to affect most major divisions of the banks but should centre on Goldman Sachs’ investment banking division.
Institutional banks have suffered a major slowdown in corporate deals as a result of volatile global financial markets.
Hundreds of jobs are also likely to be reduced from Goldman Sachs’ loss-making consumer business after it scaled back plans for its direct-to-consumer unit Marcus, the sources said.
Investment banking fees nearly halved in 2022, with US$77bil (RM336.6bil) earned globally by the banks, down from US$132.3bil (RM578.3bil) one year earlier, Dealogic data showed.
The total value of mergers and acquisitions globally had slumped 37% to US$3.66 trillion (RM16 trillion) by Dec 20, according to Dealogic data, after hitting an all-time high of US$5.9 trillion (RM25.8 trillion) last year.
Banks had executed US$517bil (RM2.26 trillion) worth of equity capital markets (ECM) transactions by late December 2022, the lowest level since the early 2000s and a 66% drop from 2021’s deal bonanza, according to Dealogic data.
The bank’s chief executive David Solomon sent a year-end voice memo to staff warning of a headcount reduction in the first half of January, two separate sources said. Goldman Sachs declined comment on the memo.
The bank restarted its annual job cutting programme in September that had been put on hold for two years during the pandemic.
The Wall Street giant typically trims about 1% to 5% of its staff each year.
These new cuts come on top of those layoffs. — Reuters
