Goldman Sachs (NYSE:GS) saw its shares flop first thing Friday, amid word the storied investment bank plans on cutting up to 8% of its employees as it girds for a tougher environment next year.
Sources say the actual number is upwards of 4,000. The bank’s planning is ongoing, and the round could be smaller than that, according to the person, who declined to be identified speaking about personnel decisions.
The likely timing for this latest round is in January ahead of the bank’s next investor conference for shareholders.
Managers across Goldman have been instructed to identify low performers as the company could cut as much as 8% of its workforce early next year, Hoffman reported. Still, no final list has been drawn up.
As of Sept. 30, 2022, the firm's headcount stood at 49,100, up 4% from June 30 and 14% from a year earlier. according to its 10-Q filing. Compensation and benefit expenses were $3.61B in Q3 2022, down 2% from the previous quarter and up 14% from the year-ago period. So 8% of that amount comes to ~3,900 jobs.
In a typical year, the firm either lays off or pays no bonus to 2%-5% of its employees, the Semafor article said. In 2020, Wall Street firms largely skipped the annual headcount cuts due to the pandemic. And in 2021, investment banking activity was so brisk, layoffs weren't needed.
In October, Goldman announced a new corporate structure that folded its relatively young consumer banking business, including its Marcus consumer digital bank, into its Asset and Wealth Management unit, essentially dialing back its consumer banking ambitions after racking up billions of dollars of losses.
Last February, at an industry conference, Goldman CEO David Solomon updated investors on the bank's progress in meeting the targets it set out two years ago.
GS shares withered $3.12 to $346.71.
