Goldman Sachs to Lay Off 3,200 Employees Following Cost Analysis

Goldman Sachs Group Inc. is cutting thousands of jobs this week as it looks to streamline its operations. The bank is targeting 3,200 positions for elimination, which represents a significant reduction in its workforce. Goldman Sachs is taking a more aggressive approach to job cuts than its competitors, and this is likely to have a major impact on the company's bottom line.

The firm is expected to start the process of reducing its workforce mid-week, with a total of 3,200 people expected to be affected, according to a person with knowledge of the matter. More than a third of those affected are likely to be from the firm's core trading and banking units, indicating the broad nature of the reductions.

The bank is also set to release financials for its new credit card and installment-lending business, which is expected to record more than $2 billion in pretax losses, according to sources familiar with the matter.

A spokesperson for the New York-based company declined to comment on reports of layoffs in its investment bank. The cuts reportedly include non front-office roles that were added to divisional headcount in recent years. The bank is said to still have plans to continue hiring, including inducting the regular analyst class later this year.

Since David Solomon became CEO, the company's workforce has grown by 34%. As of September 30, the company had more than 49,000 employees. This year's layoffs are also affected by the company's decision to mostly exempt its annual performance review during the pandemic.

Slowdowns in various business lines, an expensive consumer-banking foray, and an uncertain outlook for markets and the economy are prompting Goldman Sachs to batten down costs. Merger activity and fees from raising money for companies have taken a hit across Wall Street, and a slump in asset prices has eliminated another source of big gains for Goldman from just a year ago. Those broader industry trends have been compounded by the bank’s mistakes in its retail-banking foray where losses piled up at a much faster rate than forecast through the year.

This has resulted in a 46% drop in profits for the company, on around $48 billion of revenue, according to analyst estimates. Even so, this revenue figure has been supported by the company's trading business, which is expected to see another jump in revenue this year. This will help the firmwide figure reach its second-best performance on record. The trading division is expected to bring in more than half of the firm's total revenue, with a 14% jump in revenue for 2022. Banking fees are expected to decrease by more than 50%.

Wall Street just had its worst year for investment banking since 2016. This is according to a report from Bloomberg. The report says that the total value of all deals done by banks last year was $1.67 trillion. That is down 20 percent from the year before. The report also says that the number of deals done was down 14 percent.

What does the future hold for banks? 2023 is shaping up to be a year of change, with a potential recession on the horizon and interest rates expected to rise. In addition, banks will need to grapple with increasing diversity among their customers and employees.

It’s shaping up to be a busy year for banks! They’ll need to keep a close eye on the economy, as a potential recession could be on the horizon. In addition, interest rates are expected to rise, so banks will need to adjust their strategies accordingly. Finally, banks will need to deal with increasing diversity among their customers and employees. It’s going to be a challenging but exciting year for the banking industry!

The final job reduction figure is significantly lower than earlier proposals in management ranks that could have eliminated nearly 4,000 jobs. This is a positive outcome for employees and demonstrates the company's commitment to retaining as many jobs as possible during this difficult time.

The last major round of layoffs at Goldman Sachs came after the collapse of Lehman Brothers in 2008. Goldman had embarked on a plan to cut more than 3,000 jobs, or nearly 10% of its workforce at the time, and top executives elected to forgo their bonuses.

The latest reductions in staff and expenses represent an acknowledgment that even businesses that outperformed this year will have to make sacrifices for the sake of the company's overall performance. This year's expenses are likely to fall short of targets set by shareholders, and the company is taking steps to reduce costs.

The miss was particularly evident in a new unit called Platform Solutions, whose numbers stand out in the divisional breakdown. The more than $2 billion hit there is magnified by lending-loss provisions, exacerbated by new accounting rules that force the firm to set aside more money as loan volumes grow as well as ballooning expenses.

"There are a variety of factors impacting the business landscape, and we're focused on preparing the firm to weather these headwinds," Solomon told staff at year-end. "Tightening monetary conditions are slowing down economic activity, but we're confident in our ability to navigate these challenges."

This year, things are very different for bank staff, who are not receiving the same big bonus increases and special payouts as they did last year. In 2021, Solomon was paid $35 million, putting him alongside Morgan Stanley's James Gorman as the highest-paid CEO for a major U.S. bank.