Last Updated on December 16, 2022
Goldman Sachs is reportedly set to institute layoffs that will affect as many as 4,000 “low performing” employees as a result of recent profitability turmoil, according to a report from Semafor.
Managers have been asked to identify underperforming employees in anticipation of cuts that are expected to impact eight percent of the workforce in total. No final list or plans have been drafted, though the cuts are expected to take place early next year, sources told Semafor.
After a post-pandemic bump, CEO David Solomon is falling short of a profitability goal he set in February. Goldman Sachs had expectations on consumer banking that hasn’t paid off, in addition to “billions of dollars building a tech-forward Main Street bank, called Marcus, that isn’t yet profitable.”
Goldman Sachs has seen its workforce grow by a third since Solomon took over in 2018 to more than 49,000 current employees. The company has hired a number of new tech-based workers in that period, primarily for the Marcus project.
Other financial service providers have announced cuts in recent weeks, though the Goldman Sachs layoffs will be wider in scope if implemented as they are currently reported. Citigroup is letting go of “dozens” of staffers amid economic downturn, while Barclays is laying off roughly 200 employees.
“In a typical year, between 2% and 5% of Goldman’s employees are laid off or receive no bonus — “zeroed out” in industry parlance, a clear sign to start looking for another job,” Semafor reported. Goldman Sachs — like a number of competitors — skipped these layoffs in 2020 due to pandemic-related shutdowns. The brief, post-pandemic spike as the world reopened made them unnecessary in 2021.
“People are very nervous … all just waiting in anticipation,” a Goldman Sachs insider told the New York Post.
According to an additional report from The Financial Times, Goldman may slash bonuses for its investment bankers by 40% this year.