Goldman Sachs poised to slash headcount next month
The chief of Goldman Sachs has warned staff he will slash the bank’s headcount by around eight per cent next month in a bid to bolster profits in the face of recession next year.
The US lender is reportedly set to cull around eight per cent of staff – some 4,000 jobs – as well as cutting its bonus pool by around 40 per cent, Bloomberg News first reported.
“While discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January,” chief executive David Solomon said in a message to the group’s 49,000 staff.
“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” he added. “For our leadership team, the focus is on preparing the firm to weather these headwinds.”
The plans underscore the pressures squeezing some of Wall Street’s biggest lenders as investment banking fees slowed amid a slump in dealmaking. It comes after a bumper year in 2021 when banks pocketed record sums amid a post-pandemic dealmaking frenzy.
“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” the Goldman Sachs chief said in the message.
“For our leadership team, the focus is on preparing the firm to weather these headwinds.”
The bank is still set to post bumper profits for this year and next, however, with analysts surveyed by S&P Global Market Intelligence predicting it will make $12bn (£10bn) in net profits for 2022, and $13bn in 2023, the Guardian reported.
Goldman declined to comment.