Goldman Sachs is expected to announce new layoffs this week, affecting approximately 3,200 employees. The process is expected to begin mid-week, and the number of job cuts should not exceed 3,200.
According to a Bloomberg report, the teams most affected by the layoffs will be core trading and banking units. Goldman CEO David Solomon had previously stated that the partnership was bracing for slower economic growth as central banks raised interest rates.
“We are conducting a careful review, and while discussions are still ongoing, we anticipate our headcount reduction will occur in the first half of January,” Solomon said, according to The Guardian and news agency IANS.
Following a record year in 2022, teams working on mergers and acquisitions are particularly vulnerable in the coming year as interest rates rise, increasing the cost of borrowing the cash required to fund new deals. Investment banks had a banner year in 2021, with companies launching a massive wave of mergers and acquisitions following coronavirus pandemic lockdowns.
Goldman Sachs and other banks expanded to capitalise, but the number of lucrative deals fell back in 2022 as global interest rates rose. “A number of factors are influencing the business landscape, including tightening monetary conditions, which are slowing economic activity,” Solomon said in the message.
“The focus for our leadership team is on preparing the firm to weather these headwinds.” Goldman is still expected to report significant profits this year and next.
It should be noted that the final job reduction figure is lower than previous proposals in management ranks, which could have resulted in the elimination of nearly 4,000 jobs. The last major layoff of this magnitude occurred in 2008, following the failure of Lehman Brothers. Goldman had embarked on a plan to cut over 3,000 jobs, or nearly 10% of its workforce at the time, and top executives had elected to forego bonuses.
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