Goldman Sachs Slashing as Many as 3,200 Jobs

Goldman Sachs Headquarters in Manhattan. (giggel)

(The Washington Post) — Wall Street giant Goldman Sachs began laying off as many as 3,200 people this week, a move that follows a 2022 dealmaking slump and softening business climate, according to a person familiar with the matter who was not authorized to speak publicly.

The firm-wide cuts, totaling about 6.5 percent of Goldman’s workforce, also stem from a restructuring plan the investment bank announced in October and the reintroduction of a ritual year-end culling of underperformers that was suspended amid the pandemic, the person said.

The reductions at Goldman, whose workforce totaled more than 49,000 in September, represent the bank’s largest since the 2008 global financial crisis, Reuters reported.

The layoffs are the latest in a string that has eliminated thousands of white-collar jobs, particularly in the tech and media sectors. Last week, cloud-computing giant Salesforce announced it could lay off as many as 8,000 workers. Amazon has said it will slash 18,000 jobs while Meta, Facebook’s parent, announced last fall that it will cut 11,000 positions.

Despite the large-scale layoffs, the jobs market has shown remarkable resilience in the face of other economic head winds, primarily high inflation. Data released last week by the Bureau of Labor Statistics showed the U.S. economy added 223,000 jobs in December while the unemployment rate inched down to 3.5 percent – near record lows.

The conflicting signals reflect a fragmented job market, economists say. While large and high-profile companies undergo staff reductions, small- to medium-size employers are adding workers, The Post reported. At the same time, the large layoffs and moderating job numbers may also signal a slowing labor market.

“It’s hard to talk about the labor market in a single breath,” Aaron Terrazas, chief economist at Glassdoor, told The Post last week. He also noted that risk-intensive sectors such as tech and finance have been shedding workers in recent months as employers reevaluate geopolitical, investment and the supply chain risks.

Meanwhile, investment banking sector is coming off a slump that saw the top 10 companies record a 39 percent drop in fees in the first nine months 2022, according to a report by Dealogic. This week, Wells Fargo said it would shrink its home lending business amid higher interest rates and regulatory pressure, according to CNBC.

For its part, Goldman’s revenue fell 21 percent during the first nine months of 2022 compared with the same period a year earlier, and its stock price has dropped about 10 percent over the past year. It will release fourth-quarter results on Tuesday.

In an October investment call, Goldman chief executive David Solomon said the “global economy continues to face significant head winds.”

He referenced high inflation, the Federal Reserve’s raising of interest rates and geopolitical instability. “Everywhere I go, macro themes dominate,” he said.

Solomon also detailed the investment bank’s reorganization plans, calling it a “strategic evolution.” He said the company would integrate its consumer banking business and its wealth management division, consolidate its fintech platforms and consolidate its investment banking and global markets business.

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