Goldman Sachs is planning to cut hundreds of jobs this month after pausing the annual practice for two years during the pandemic.
Every year, the Wall Street giant typically reviews its headcount, trimming one to five percent of employees based on performance and the bank’s demands.
It had put the operation on hold during the pandemic, which also overlapped with a peak period for deal-making when bankers protested work overload.
A source said this wave of layoffs will be at the lower end of that spectrum.
Goldman’s CFO, Denis Coleman, told analysts in July that the firm was “probably reinstating our annual performance review of our employee base at the end of the year.”
The decision comes as the Federal Reserve’s effort to control inflation by increasing rates is slowing deal-making and raising fears the US economy will face a depression.
The war in Ukraine has added further uncertainty to the situation.
Goldman Sachs announced in July its second-quarter profit had fallen nearly 50 percent year on year to just under $3 billion.
Revenue from Goldman’s investment banking division dropped 41 percent from the same period in 2021.
The bank stated that its contract backlog has decreased, but did not specify the data.
At the time, the bank stated that hiring will decline for the rest of the year.
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In a July call, CEO David M. Solomon said: “No question that the market has gotten more challenging.
“We have made the decision to slow hiring velocity and reduce certain professional fees going forward.
“We are keeping in mind, however, that while we’re being disciplined about our expenses, we are not doing so to the detriment of our client franchise or our growth strategy.”
Source: The New York Times