Goldman Sachs to lay off more than 3,000 employees
"Slowdowns in various business lines" and "an uncertain outlook for markets" are reasons for the cuts, notes Bloomberg.
Goldman Sachs Group will undergo one of its largest rounds of layoffs with a plan to eliminate around 3,200 jobs right at the start of 2023. According to Bloomberg:
The final number of cuts will be less than the proposals made from the upper management ranks, which would have eliminated almost 4,000 jobs.
Forty-six percent drop in profits
Since the end of 2018, under the leadership of CEO, David Solomon, Goldman Sachs' workforce increased by 34%, amounting to more than 49,000 employees. During the pandemic, the company implemented an annual evaluation of underperforming workers. Therefore, the magnitude of layoffs this year may also have been driven by the company's decision to continue with this plan. According to Solomon:
Falling asset prices on Wall Street have eliminated another large source of profits for Goldman from a year ago. In addition, the decline has been compounded by errors in its foray into retail banking, where losses occurred at a faster rate than expected. These blunders have caused the bank to face a 46% drop in profits, according to analysts' estimates.
Companies fail to meet targets
The group's last major layoff came after the collapse of Lehman Brothers in 2008. Goldman made a plan to eliminate more than 3,000 jobs, nearly 10% of its workforce at the time, and top executives opted to forgo their bonuses. Bloomberg noted:
People connected with the firm, who asked not to be identified, said the group will disclose the loss of $2 billion of capital tied to a new unit called Platform Solutions that is the foundation of its credit card and installment lending business.