Goldman Sachs to lay off up to 1,800 employees: Report
Goldman Sachs is planning to lay off between 3% and 4% of its workforce, as part of its annual review process, as per WSJ. This could result in nearly 1,300 to 1,800 employees losing their jobs. The layoffs have already begun and are expected to continue into the fall season. Various divisions across the bank will be affected by these job cuts.
Annual talent review is normal, standard and customary: Goldman Sachs
Tony Fratto, a spokesperson for Goldman Sachs, commented on the layoffs. He described the annual talent reviews as "normal, standard and customary, but otherwise unremarkable." Despite these job cuts, Fratto expects that the bank's total headcount will be higher by year-end compared to 2023. This suggests that while some positions are being eliminated, new roles may also be created within the organization.
Other banks follow similar practices
The WSJ report also noted that other major banks follow similar practices of trimming their workforces by identifying and eliminating underperforming employees. In the first quarter of this year, the largest US banks collectively laid off 5,000 employees to manage costs in a challenging economic environment. Citigroup made the most significant reduction by eliminating 2,000 positions during this period.
Goldman Sachs's history of workforce reductions
Historically, Goldman Sachs's annual review process has resulted in workforce reductions ranging from 2% to 7%, with variations depending on the bank's financial outlook and prevailing market conditions. Last year, the bank implemented a 6% cut in January, followed by additional layoffs in May and the fall. This year's planned layoffs are consistent with these historical trends.
Goldman Sachs revises recession outlook
Earlier this month, Goldman Sachs revised their outlook on the likelihood of a US recession, lowering the probability to 20% from 25%. This adjustment was based on encouraging retail sales figures and unemployment claims data. The bank's economists have indicated that a positive jobs report, expected on September 6, could allow them to further reduce the recession risk to 15%, where it had stood for nearly a year before a recent revision.
