According to a source familiar with the matter, Goldman Sachs has begun laying off employees on Wednesday as part of a broad cost-cutting drive, with roughly one-third of those affected coming from the investment banking and global markets division, according to reports quoting information from sources with knowledge of the matter.
The long-awaited job cut at the Wall Street behemoth is expected to be the most significant reduction in headcount since the financial crisis. According to Reuters, it is likely to affect most of the bank's major divisions, with its investment banking arm facing the most severe cuts.
A little more than 3,000 employees will be let go, according to an unnamed source on Monday. On Wednesday, a separate source confirmed that the cuts had begun.
"We know this is a difficult time for people leaving the firm," a Goldman Sachs statement on Wednesday said.
"We're grateful for all our people’s contributions, and we're providing support to ease their transitions. Our focus now is to appropriately size the firm for the opportunities ahead of us in a challenging macroeconomic environment."
As a possible global recession looms, the cuts are part of broader reductions across the banking industry. At least 5,000 people are being laid off from various banks. In addition to the 3,000 layoffs at Goldman, Morgan Stanley has cut about 2% of its workforce, or 1,600 people, a source said last month, while HSBC has laid off at least 200 people.
According to Paul Sorbera, president of Wall Street recruitment firm Alliance Consulting, last year was difficult in many areas, including credit, equities, and investment banking in general. "Many people did not create budgets."
"It's just part of Wall Street," Sorbera said. "We're used to seeing layoffs."
The most recent layoffs will affect about 6% of Goldman's workforce, which stood at 49,100 at the end of the third quarter.
Since the coronavirus pandemic, the company has added more than 10,000 jobs as markets have boomed.
The cuts come as major US banks are expected to report lower profits this week. According to the average forecast of analysts on Refinitiv Eikon, Goldman Sachs will report a net profit of $2.16 billion in the fourth quarter, down 45% from $3.94 billion in the same period last year.
Goldman Sachs shares have partially recovered from a 10% drop last year. On Wednesday, the stock closed up 1.99%, bringing its year-to-date gain to around 6%.
Goldman's layoffs began in Asia on Wednesday, when the firm completed reducing its private wealth management business and laid off 16 private banking employees across its Hong Kong, Singapore, and China offices, according to a source familiar with the matter. According to the source, approximately eight employees were also laid off in Goldman's research department in Hong Kong, with layoffs continuing in the investment banking and other divisions.
Rain reduced the likelihood of staff huddles at Goldman's central London headquarters. Several security guards patrolled the building's entrance, but there were few people entering or leaving the property. A peek into the bank's recreational area just beyond the lobby revealed a few staffers deep in conversation but no signs of drama.
Local wine bars and eateries were also short of post-lunch business, in stark contrast to previous large-scale layoffs, when unlucky employees would typically gather to console one another and plan their next career moves.
During the morning rush in New York, employees were seen streaming into headquarters.
The Financial Times reported on Wednesday that Goldman's redundancy plans will be followed by a broader spending review of corporate travel and expenses, as the U.S. bank counts the costs of a massive slowdown in corporate dealmaking and a slump in capital markets activity since the Ukraine war.
In addition, to reflect the current market conditions, the company is reducing its annual bonus payments by 40% this year.
(Source:www.businesstoday.in)
The long-awaited job cut at the Wall Street behemoth is expected to be the most significant reduction in headcount since the financial crisis. According to Reuters, it is likely to affect most of the bank's major divisions, with its investment banking arm facing the most severe cuts.
A little more than 3,000 employees will be let go, according to an unnamed source on Monday. On Wednesday, a separate source confirmed that the cuts had begun.
"We know this is a difficult time for people leaving the firm," a Goldman Sachs statement on Wednesday said.
"We're grateful for all our people’s contributions, and we're providing support to ease their transitions. Our focus now is to appropriately size the firm for the opportunities ahead of us in a challenging macroeconomic environment."
As a possible global recession looms, the cuts are part of broader reductions across the banking industry. At least 5,000 people are being laid off from various banks. In addition to the 3,000 layoffs at Goldman, Morgan Stanley has cut about 2% of its workforce, or 1,600 people, a source said last month, while HSBC has laid off at least 200 people.
According to Paul Sorbera, president of Wall Street recruitment firm Alliance Consulting, last year was difficult in many areas, including credit, equities, and investment banking in general. "Many people did not create budgets."
"It's just part of Wall Street," Sorbera said. "We're used to seeing layoffs."
The most recent layoffs will affect about 6% of Goldman's workforce, which stood at 49,100 at the end of the third quarter.
Since the coronavirus pandemic, the company has added more than 10,000 jobs as markets have boomed.
The cuts come as major US banks are expected to report lower profits this week. According to the average forecast of analysts on Refinitiv Eikon, Goldman Sachs will report a net profit of $2.16 billion in the fourth quarter, down 45% from $3.94 billion in the same period last year.
Goldman Sachs shares have partially recovered from a 10% drop last year. On Wednesday, the stock closed up 1.99%, bringing its year-to-date gain to around 6%.
Goldman's layoffs began in Asia on Wednesday, when the firm completed reducing its private wealth management business and laid off 16 private banking employees across its Hong Kong, Singapore, and China offices, according to a source familiar with the matter. According to the source, approximately eight employees were also laid off in Goldman's research department in Hong Kong, with layoffs continuing in the investment banking and other divisions.
Rain reduced the likelihood of staff huddles at Goldman's central London headquarters. Several security guards patrolled the building's entrance, but there were few people entering or leaving the property. A peek into the bank's recreational area just beyond the lobby revealed a few staffers deep in conversation but no signs of drama.
Local wine bars and eateries were also short of post-lunch business, in stark contrast to previous large-scale layoffs, when unlucky employees would typically gather to console one another and plan their next career moves.
During the morning rush in New York, employees were seen streaming into headquarters.
The Financial Times reported on Wednesday that Goldman's redundancy plans will be followed by a broader spending review of corporate travel and expenses, as the U.S. bank counts the costs of a massive slowdown in corporate dealmaking and a slump in capital markets activity since the Ukraine war.
In addition, to reflect the current market conditions, the company is reducing its annual bonus payments by 40% this year.
(Source:www.businesstoday.in)
