Report: Goldman Sachs to Cut 3.2K Employees
Goldman Sachs will reportedly lay off as many as 3.2K employees this week, as the company actively looks to cut costs amid an uncertain economic and market climate.
Facts
- Goldman Sachs will reportedly lay off as many as 3.2K employees this week, as the company actively looks to cut costs amid an uncertain economic and market climate.
- Goldman had 49.1K employees at the end of the third quarter in October, after hiring substantial numbers of new employees during the COVID pandemic.
- The layoffs will account for seven percent of Goldman Sachs's workforce and will be the most extensive layoffs at the company since the 2008 financial crisis.
- Goldman’s move follows smaller layoffs from companies like Morgan Stanley, Citigroup, and Barclays in recent months. Some investment banks are also taking a “wait and see” attitude in the coming weeks, and if revenues continue to lag in February and March, they may cut more workers.
- The layoffs will cut more than 1K positions within Goldman’s trading and banking sectors as the company seeks to scale back on its consumer banking business and faces slowing activities in capital markets overall. Goldman is expected to report a 46% decline in profit on roughly $48B of revenue in 2022.
- However, hiring in other areas of the company is expected to continue, and a new analyst class of employees will start later this year as scheduled.
Sources: CNN, Reuters, Observer (NY), and CNBC.
Narratives
- Narrative A, as provided by New York Post. The layoffs at Goldman Sachs are necessary due to the company's many poor business decisions. Workers are being let down on multiple fronts. The recently announced layoffs will come on top of the usual job cuts and yearly fluctuations that the company experiences.
- Narrative B, as provided by CNN. The Federal Reserve and other central banks' aggressive raising of interest rates to rein in inflation led to the current layoffs. Companies are looking to cut costs in case interest rate hikes cause a global recession and decrease the appetite for Goldman's key business functions like mergers and acquisitions and Initial Public Offerings. These layoffs were inevitable in the current economic and market climate.
