Goldman Sachs plans to cut as many as 4,000 “underperforming” staffers to cut costs during a profitable crisis, according to a Friday report.
Top Brass has reportedly asked managers to identify struggling employees for potential cuts, Semafor reported, citing sources familiar with the matter. The layoffs will take effect early next year and could affect up to 8% of Goldman’s workforce, which currently numbers more than 49,000 employees.
The bank has yet to make final decisions about the scope of the projected job cuts, a person familiar with the bank’s thinking told The Post. After the layoffs, the bank’s workforce will still be higher than before the COVID-19 pandemic.
As The Post reported on Dec. 6, Goldman’s annual performance review process is causing a stir among employees this year as workers brace for potential cuts.
“People are very nervous… they are all anxiously waiting,” a Goldman insider told The Post at the time.
Goldman Sachs declined to comment.
The layoffs are part of a series of cost-cutting measures reportedly being considered at the bank. The Financial Times reported that Goldman may cut bonuses for its investment bankers by 40% this year – the sharpest cut since the Great Recession.
Earlier this week, Bloomberg reported that Goldman was planning at least 400 cuts in its struggling retail banking division.
David Solomon, CEO of Goldman Sachs, recently cited difficult global economic conditions heading into 2023 and indicated that the bank would seek cost reductions – with a headcount reduction being one of its planned initiatives.
“We continue to see headwinds on our spending lines, especially in the short term,” Solomon said at a conference last week, according to Bloomberg. “We have initiated some cost containment plans, but it will take time to realize the benefits. Ultimately, we will remain nimble and adapt the business to the opportunities that arise.”
In October, Solomon told CNBC it was “a time to be cautious” and warned of a “good chance” that the US economy could slide into recession.
Goldman had been hiring en masse in recent years in a Solomon-led consumer banking quest. A trio of acquisitions, including the purchase of specialist lender GreenSky last year, has also boosted the bank’s headcount.
Goldman is the latest of several companies to plan layoffs as Wall Street prepares for a worsening economic outlook. Citigroup recently announced it would cut dozens of jobs at its company, while Barclays laid off about 200 employees and Morgan Stanley cut about 1,600 jobs.
The bank’s profitability has plummeted this year, partly due to Marcus, the money-losing consumer digital bank. In October, Goldman announced a major internal shakeup, merging its investment banking and trading businesses into one unit and folding Marcus into its wealth and asset management division.