US Banking Giant Goldman Sachs To Layoff Hundreds Of Employees In Biggest Jobcuts Since Pandemic

Major US investment bank Goldman Sachs will this month begin its biggest round of jobs cuts since the start of the pandemic.

The layoffs may begin as early as next week, a Reuters report mentioned. The banking giant plans to eliminate several hundred roles, according to people with knowledge of the matter. While the total number is less than some previous rounds, the reductions are a resumption of Goldman¡¯s annual culling cycle that it had largely paused during the pandemic, as per Bloomberg report.

This move from the major US bank is the surest sign yet of a chill that has set in across the industry amid a slump in revenue after record-breaking years. Analysts reportedly expect the bank to post a more than 40% drop in earnings this year, according to data compiled by Bloomberg.

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The New York-based firm had said in July 2022 that it planned to slow hiring and reinstate annual performance reviews, foreshadowing the job cuts it planned to undertake later in the year. It¡¯s an effort to rein in expenses amid what it called a ¡°challenging operating environment.¡±

The reviews are typically used to weed out the worst-performing staff. Goldman could also reduce the pace of replacing staff it loses because of attrition, Chief Financial Officer Denis Coleman said at the time, as per the report. Goldman had 47,000 employees at the end of the second quarter, compared with 39,100 two years earlier, aided by recent acquisitions.

The New York Times had reported earlier yesterday that Goldman Sachs was preparing job cuts.

Goldman Sachs will join the list of numerous big companies that have announced layoffs in recent months, including Elon Musk's Tesla, tech giant Microsoft and Ford. Google CEO Sundar Pichai too had hinted about potential layoffs last week to improve the company¡¯s efficiency by 20%.

Also Read: Tesla Employee Sacked Over The Phone While On Vacation

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Financial Slowdown Hurting The Bank

As per Bloomberg report, the US banking giant has been hurt by the dramatic slowdown in investment banking as the volatility that spurred gains for trading also weighed on capital markets and asset management. While the firm¡¯s trading operation posted a 32% surge in revenue in the second quarter, investment-banking revenue fell 41%, reflecting a sharp drop in underwriting.

Also, the American bank¡¯s total operating expenses declined in the second quarter from a year earlier as Goldman reduced compensation and benefits, but the company also reported increases in costs from growth initiatives.

Goldman shares are down more than 10% this year and about 15% from a year ago. That compares with a 7.5% drop in the S&P 500 Financials index for the past 12 months, the report mentioned.

Also Read: List Of Companies That Have Laid Off Employees In 2022

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