The Blubber

Per Bloomberg

Goldman Sachs is letting go of almost 3,200 employees, with over a third coming from its core banking and trading units. Since 2018, the bank has grown by 34%, recorded on September 2022.

Under Goldman Sachs CEO David Solomon, the bank grew its staff and reached 49,000 employees in September of last year. The bank's firing plans are expected to start for the week's first round of layoffs.

The news comes from people with knowledge about the matter, and as per sources, they say that a new credit card and installment lending business unit is expected to be unveiled. This unit was responsible for losses of over $2 billion USD or $2.9 billion pretax.

Goldman Sachs's decision will directly affect its underperformers during the pandemic as the bank is trying to reduce costs. Aside from the economy, the expensive consumer-banking foray and various business line slowdowns have also ultimately led to the decision to cut down its number of employees.

The bank experienced a 46% drop in profits, per analyst estimates. Despite its 3,200 employee reduction plan, this is still a significant discount from its initial reduction proposals that planned to let go of 4,000 workers.

The last time that Goldman Sachs let go of staff at this scale was after the 2008 collapse of the Lehman Brothers. The bank, at that time, let go of over 3,000 jobs, which meant almost 10% of its workforce during that period.

Goldman Sachs CEO David Solomon gave a statement regarding the job cuts and the factors that led the bank to this decision. The announcement of job cuts comes a week before the bank's traditional annual compensation discussions.

Solomon: “There are a variety of factors [affecting] the business landscape, including tightening monetary conditions that are slowing down economic activity... For our leadership team, the focus is on preparing the firm to weather these headwinds.”

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Resources:

Bloomberg