Goldman Sachs To Slash Nearly 3,200 Jobs This Week After Cost Review: Report

Goldman Sachs is also poised to unveil financials tied to a new unit that houses its credit card and instalment-lending business, which will record more than $2 billion in pre-tax losses

Goldman Sachs Group is set to cut jobs of about 3,200 positions this week, with the bank’s leadership going deeper than rivals to shed jobs, as reported by Bloomberg. Citing a source privy to the development, the company is expected to start the process mid-week and the total number of people impacted will not exceed 3,200.

More than a third of those will likely be from within its core trading and banking units, indicating the broad nature of the cuts. The bank is also poised to unveil financials tied to a new unit that houses its credit card and instalment-lending business, which will record more than $2 billion in pre-tax losses, the sources told Bloomberg.

The cuts in its investment bank are elevated by the inclusion of the non-front-office roles that were added to divisional headcount in recent years. The bank still has plans to continue hiring, including inducting the regular analyst class later this year.

According to the report, under Chief Executive Officer David Solomon, headcount has jumped 34 per cent since the end of 2018, climbing to more than 49,000 as of September 30, data show. The scale of firings this year is also affected by the firm’s decision to mostly set aside its annual cut of underperformers during the pandemic.

Slowdowns in various business lines, an expensive consumer-banking foray, and an uncertain outlook for markets and the economy are prompting the bank to batten down costs. That’s left the bank facing a 46 per cent drop in profits, on about $48 billion of revenue, according to analyst estimates. Still, that revenue mark has been buoyed by its trading division that will post another jump this year, helping the firm-wide figure notch its second-best performance on record.

The final job reductions figure is significantly lower than earlier proposals in management ranks that could have eliminated nearly 4,000 jobs.

The last major exercise of this scale came after the collapse of Lehman Brothers in 2008. Goldman had embarked on a plan to cut more than 3,000 jobs, or nearly 10 per cent of its workforce at the time, and top executives elected to forgo their bonuses.

Last week, US tech and e-commerce major Amazon announced that it would cut more than 18,000 jobs from its workforce, citing an ‘uncertain economy' and the fact that the retail giant has ‘hired rapidly over the last several years.’