Goldman Sachs set for biggest axe of its staff

LONDON: Goldman Sachs is expected to start one of the biggest rounds of redundancies in its history this week, with as many as 3,200 jobs to go as it looks to cut costs, the media reported.

The bank is expected to begin informing people that they will lose their jobs on Wednesday, it was reported. The world’s big investment banks enjoyed a boom in 2021 and early 2022 as companies embarked on a huge number of mergers and acquisitions after coronavirus lockdowns.

However, the number of takeovers has dropped significantly as interest rates have risen and company valuations have plummeted, the media reported.

Goldman Sachs expanded rapidly faster than its rivals during the boom, and did not institute its usual practice of firing the lowest performers. The chief executive, David Solomon, late last month told staff that the cuts were necessary to “weather the headwinds” caused by rising interest rates.

The cuts are expected to be concentrated in the investment banking division, where fee income has fallen, and its consumer arm, where it has scaled back ambitions for the underperforming Marcus brand -- though most divisions across the bank are likely to be affected. The 3,200 job losses would represent about 7 per cent of the bank’s global workforce of 49,000. As per an agency which first reported the proposed extent of the job cuts, said the bank would continue hiring at junior levels.

Goldman had reportedly been considering as many as 4,000 job losses. It is also thought to be considering cuts to its bonus pool of up to 40 per cent.

The job and bonus cuts will allow Solomon to offer signs of action to the bank’s shareholders when it reports its full-year earnings on 17 January. Goldman is expected to report its second-best annual profits since 2009, but investors are concerned that the bank’s shares are trading at a discount relative to rivals such as Morgan Stanley, the report said.