Goldman Sachs Signals Mass Job Cuts in Coming Weeks

Banks

Visbanking Editorial|7/7/2023|1 min readBanksNewsbankingbanksDavid Solomoneconomy

Estimated reading time: 2 minutes

By: Ken Chase

Earlier this month, Goldman Sachs CEO David Solomon told Bloomberg that he saw “bumpy times ahead” that would lead to cuts in the bank’s workforce. In this week’s annual year-end memo to the bank’s staff, Solomon went even further, notifying his team that a large number of layoffs would begin within the next several weeks.

The notice comes amid a decline in profits for many major banks and an industry-wide shift to reducing workforces in anticipation of slowing economic activity. Like other major U.S. financial firms, Goldman recently returned to its pre-pandemic practice of cutting underperformers. Solomon’s recent message to the bank’s workforce is a reminder that Goldman is doubling down on its efforts to correctly size its workforce to meet the firm’s needs.

While the exact size of the staff reduction has yet to be announced, Solomon was clearer about the timing:

“We are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January.”

The job cut news follows on the heels of reports suggesting that the nation’s largest banks have already made plans to slash bonuses by up to 30% due to worries about an impending economic slowdown. Meanwhile, compensation consultancy Johnson Associates has forecast that banker bonuses could be reduced by up to 45%.