Goldman Sachs intends to fire up to 1,800 employees as part of an annual review process targeted at underachievers.
The COVID-19 pandemic caused the investment bank to halt performance-related job cuts for two years, but they resumed in 2022.
“Our annual talent reviews are normal, standard and customary, but otherwise unremarkable. We expect to have more people working at Goldman Sachs in 2024 than 2023,” a Goldman spokesperson said in a statement to Reuters.
According to reports, between 1% and 5% of Goldman employees lost their jobs as a result of the exercise in 2023. The reductions made by Goldman’s strategic resource assessment have changed over time in response to changes in the financial outlook and the state of the market.
Around 44,300 people worked for the bank worldwide as of the end of the quarter on June 30. In 2023, it underwent several rounds of workforce reductions as deal-making deteriorated and the macroeconomic outlook was negatively impacted by higher-than-expected interest rates. Since then, the banking industry has seen improvement.
Goldman Sachs reported second-quarter profit in July 2024 that more than doubled due to robust fixed-income trading and debt underwriting. Corporate executives now feel more confident to pursue deals, debt sales, and stock offerings thanks to the US economy’s resilience. However, the amount of dealmaking activity has not increased to historical levels, even with a recovery in the industry.
In recent trading, Goldman Sachs shares showed signs of life and ended the day 0.6% higher. The stock has risen 32% so far this year, outperforming both the larger markets and an index that tracks competing large-cap banks.
According to a Wall Street Journal story earlier in the day, the layoffs, which could affect over 1300 workers, or 3%–4% of the company’s workforce, will continue through the fall.
Nonetheless, Goldman claimed in its statement to Reuters that the figures published by the Journal were untrue.
According to the Wall Street Journal report, Goldman Sachs is not the only major lender to carry out similar layoffs to eliminate low-performers in the workforce. Citigroup has eliminated 2,000 employees in 2024.
“One of the parameters considered in the annual performance reviews at these banks is in-office attendance as many employees prefer working from home. In 2023, Goldman Sachs cut 3200 people in January alone and around 1-5% in October. In September 2022, around 500 people from the workforce were laid off,” the report noted.