The actual number of employment cuts is much lower than prior management-level proposals, which might have resulted in the loss of over 4,000 positions
With a plan to remove approximately 3,200 employees this week, Goldman Sachs Group Inc. is starting one of its biggest rounds of job cutbacks ever, with the bank’s leadership going further than competitors, Bloomberg reported.
The actual number of employment cuts is much lower than prior management-level proposals, which might have resulted in the loss of over 4,000 positions.
The company anticipates starting the procedure in the middle of the week, and the maximum number of individuals impacted is 3,200, based on a source with knowledge of the situation. Given the size of the layoffs, more than a third of those would probably come from its main banking and trading divisions.
According to the people, who asked to remain anonymous because they were addressing private information, the company is also getting ready to release financial data related to a new unit that houses its credit card and installment lending businesses. This unit will post pre-tax losses of more than USD two billion.
Due to the addition of non-front-office functions to divisional staff in recent years, the reductions in its investment bank are magnified. The bank still intends to hire more people, and will eventually welcome the usual analyst class.
As of 30 September, according to data, the workforce under Chief Executive Officer David Solomon has increased by 34 per cent since the end of 2018.
The company’s choice to primarily reserve its annual cut of underperformers throughout the pandemic had an impact on the number of dismissals this year.
The bank is being forced to cut expenses as a result of slowdowns in several economic sectors, an expensive consumer banking venture, and an uncertain outlook for the markets and the economy.
These broader industry trends have been made worse by the bank’s errors in its retail banking venture, where losses accumulated throughout the year at a rate that was significantly higher than anticipated. On an estimated USD 48 billion in sales, this has left the bank facing a 46 per cent decline in profits.
The trading section of the company, which will report another increase this year, has still helped the revenue mark reach its second-best performance on record.
The 2008 collapse of Lehman Brothers marked the last significant exercise of this magnitude. At the time, Goldman had a plan to eliminate roughly 10 per cent of its employees, or more than 3,000 positions, and its top executives decided to forgo their incentives.