Goldman Sachs to axe more than 3,000 bankers in just days
Wall Street banking giant Goldman Sachs will axe 3,200 workers in just days to protect its finances from a likely recession in the US and a slowdown in global deal making.
The lender is expected to shrink its staff force by around 6.5 per cent and will tell workers on Wednesday if they are part of the cull.
Bloomberg first reported the news.
While the redundancy drive is better than the worst-case scenario figure of 3,900 quoted by chief David Solomon at the end of last year, it is still amongst the deepest cuts in the bank’s more than century-long history.
Discussing the plans in December, Solomon, 61, said: “There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity.”
“For our leadership team, the focus is on preparing the firm to weather these headwinds,” he added.
The cuts come as the global economy is expected to enter recession this year. The US slowdown has been intensified by the Federal Reserve hiking interest rates at the fastest pace since the 1980s, piling pressure on businesses and households.
Goldman’s share price has dropped more than 10 per cent over last year
Higher borrowing costs has made it more expensive for companies to finance takeovers and listings, sending a chill through the global deal making environment.
Merger and acquisitions and listings are a key source of income for Goldman, which advises private businesses listing on public markets.
The sackings come after Goldman skipped its annual cut of under performers during the pandemic, suggesting it is catching up on dismissing bankers who missed targets and that job losses may be concentrated among junior analysts.
The redundancies are likely to be focused in the investment banking division and its consumer arm, although all divisions are expected to face some cuts.
Goldman will continue to hire junior analysts, potentially replacing employees who are laid off.
In its latest set of earnings, the New York-based bank reported a steep fall in investment banking income.
Revenue in the division more than halved to $1.58bn (£1.39bn) from $3.70bn (£3.26bn) in the same period last year. Overall revenue fell 12 per cent.
In restructuring plans announced alongside its results, the company also said it will scale back expansion plans for its consumer arm, Marcus, by merging it into a wider asset and wealth management business.
Other Wall Street banks are slimming staff to offset recession pressures. Morgan Stanley last year announced 1,600 job cuts.
Goldman will release its fourth quarter earnings on January 17.
Goldman Sachs declined to comment.