Goldman Sachs has confirmed that it will be laying off as many as 4,000 people starting next month. Chief executive David Solomon has reportedly told the staff that the job cuts will start in January.
Multiple media reports had said more than ten days ago that the investment banking giant was laying off about 8 percent of its global staff. The bank had come around to cutting thousands of jobs as revenues have taken a hit following the drying up of deal making in the post-pandemic months, according to reports.
Cuts to Bonus Pool
Apart from cutting 4,000 jobs, the bank is also considering cuts to its bonus pool of up to 40 per cent, The Guardian newspaper reported. "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 CEO 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," the CEO added, according to IANS.
The bank had added more staff in the post-pandemic times, on the back of thriving deals. However, with economic gloom settling in, the fortunes have turned bleak for teams handling mergers and acquisitions.
Goldman Sachs had nearly 50,000 employees as of the end of the third quarter. Sources said even after cutting thousands of jobs, the bank will have more than its pre-pandemic staff strength, according to Reuters. According to a filing, the workforce stood at 38,300 at the end of 2019.
Goldman Sachs had cut about 500 employees in September. The move had come after Goldman Sachs reported a 48 percent plunge in its second quarter profit. Its investment banking revenue was $2.1 billion, a drop of 41 percent. "There is no question that the market environment has gotten more complicated and a combination of macroeconomic conditions and geopolitics is having a material impact on asset prices, market activity and confidence," Goldman Sachs Chief Executive David Solomon told BBC.
According to analysts surveyed by S&P Global Market Intelligence, Goldman will make $12 billion in net profits for 2022, and $13 billion in 2023.