The Goldman Sachs logo is seen at the New York Stock Exchange in New York City on September 13, 2022. Goldman is laying off up to 3,200 employees as it faces a more challenging business environment. .
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The Goldman Sachs logo is seen at the New York Stock Exchange in New York City on September 13, 2022. Goldman is laying off up to 3,200 employees as it faces a more challenging business environment. .
Image of Michael M. Santiago/Getty
At Goldman Sachs, the new year is starting with thousands of job cuts.
One of Wall Street’s biggest banks plans to lay off up to 3,200 employees this week, as the bank faces a challenging economy, a downturn in the investment banking sector and challenges in the retail banking sector.
It was one of the biggest layoffs at Goldman since the 2008 global financial crisis.
Goldman, like many other investment banks, has seen its profits suffer as markets tumble since last year as the Federal Reserve raised interest rates sharply.
The recession has led to a sharp decline in the number of stock exchanges and listings, as well as trading activity. Goldman has also struggled to gain traction in consumer banking despite investing heavily.
“Wall Street is still Wall Street, and that means a very intensive, money-making environment for clients and their companies that is intense and adjusts to trends as conditions change,” Mike said. Mayo, a Wells Fargo analyst who has covered commercial banks for decades.
Goldman is restructuring its business
Goldman CEO David Solomon has highlighted the difficulty of the current economic environment.
Financial firms, as well as technology companies, have increased headcount during the pandemic as business activity was booming, but now they are forced to announce job cuts and rethink about how it works. Goldman had just over 49,000 employees at the end of September.
Goldman CEO David Solomon listens during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon/AFP via Getty Images
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Patrick T. Fallon/AFP via Getty Images
Goldman CEO David Solomon listens during the Milken Institute Global Conference in Beverly Hills, California, on May 2, 2022.
Patrick T. Fallon/AFP via Getty Images
In October, Goldman announced an extensive restructuring plan. It combined commercial and investment banking into one unit and created a new division focused on the company’s digital services.
Goldman is also trying to compete with the likes of JP Morgan Chase & Co. and Bank of America in retail banking.
For nearly a decade, Goldman Sachs has been trying to get in there, but their consumer-facing brand, Marcus, has never been noticed.
Marcus has been brought into Goldman’s wealth and wealth management division as part of that restructuring, and the head of that division announced plans to leave the company last week.
The reduction of personnel is back to normal
It’s not just the business downturn that has fueled fear of layoffs on Wall Street.
Goldman Sachs and other Wall Street firms have traditionally cut underperforming employees every year, a practice they’ve halted during the pandemic. For example, Goldman did not make these regular layoffs in 2020, 2021 and 2022.
Chris Kotowski, an analyst at Oppenheimer & Co., said everyone working on Wall Street is used to these types of layoffs, no matter how difficult. It’s just part of the business.
“You know, people don’t practice,” he said. “Sometimes you expand into an inefficient area, and sometimes you hire too much.”
And even after this week’s layoffs, Goldman Sachs’ headcount is expected to be larger than it was before the pandemic.
