After Twitter and Meta laid off hundreds of employees this year, David Solomon, the chief executive of US investment bank, Goldman Sach unveiled his plan to cut jobs from January next year in his traditional year-end message to staff, amid concerns over the declining global economy. Solomon said, “We are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January.” People familiar with the situation said that the bank is considering cutting some 4,000 jobs or 8 per cent of its 49,000 workforce.
Executives claimed that the workforce increased by nearly 34 per cent since 2018.
No final job-cut numbers have been finalised. The top managers and officials have been asked to identify potential cost-reduction targets.
“We need to proceed with caution and manage our resources wisely,” Solomon said.
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Goldman and other investment banks around the world enjoyed a boom after the Covid pandemic in 2021 as many companies launched mergers and acquisitions. They were expected to record the same this year, but due to increasing interest rates, this seems difficult.
Despite rising interest rates, Goldman according to a survey conducted by S&P Global Market is expected to report big profits this year and next. The analysts predicted that it will make nearly $12 billion in net profits for 2022 and $13 billion in 2023, Guardian reported.
Despite such profits, the bank has been under pressure to improve its stock market valuation which has relatively declined in comparison to other US investment banks. Its shares fell by 14 per cent in 2022.
(With inputs from agencies)
