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Goldman Sachs CEO says job cuts to come as soon as January

CEO David Solomon told staff Goldman was holding discussions about a headcount reduction, according to Bloomberg.

Goldman Sachs (GS) is preparing to trim its workforce in the coming weeks, Chief Executive Officer David Solomon told staff in a year-end audio message.

The leader of Wall Street’s top investment bank told employees that it was conducting a review of the company’s headcount and holding discussions about layoffs likely to take place in the first half of January, Bloomberg reported Wednesday.

Goldman Sachs declined to comment.

“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” Solomon reportedly said. “For our leadership team, the focus is on preparing the firm to weather these headwinds.”


Bloomberg also reported top managers have been asked to identify potential cost-reduction targets and that a final count of job cuts has not been determined.

Earlier this month, Semafor reported Goldman was planning to cut up to 8% of its workforce, or about 4,000 jobs.

David Solomon, Chairman and CEO, Goldman Sachs, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California. (Photo by Patrick T. FALLON / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images)
David Solomon, Chairman and CEO, Goldman Sachs, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California. (Photo by Patrick T. FALLON / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) (PATRICK T. FALLON via Getty Images)

The bank employed 49,100 people at the end of the third quarter, according to a regulatory filing, up from 43,000 during the same period last year following a ramp up in hiring throughout 2021 as dealmaking activity boomed after the height of the pandemic.

The layoff discussions come after a substantial slowdown in bank profits this year, with market volatility slashing investment banking revenue — and as many companies reduce their workforces to cut costs in anticipation of a potential recession.

At the Wall Street Journal’s CEO Council Summit earlier this month, Solomon acknowledged the banking industry’s aggressive hiring last year and in 2020 to keep up with record dealmaking activity during the period.

“It’s a natural phenomenon that you therefore have to trim in some areas and pull back, and so we’re going through the process of thinking about how we’re going to do that,” Solomon said. “But for sure, we’ll have to narrow our footprint a little bit.”

In an earnings call earlier this year, Goldman Sachs said it would reinstate annual performance reviews paused during the pandemic, a strategy that has historically served to weed out laggard bankers — in addition to slowing hiring. A reduction of up to 8% would go beyond its typical annual cull of low performers.

Peers in the financial industry have also discussed or delivered layoffs. Morgan Stanley (MS) has reportedly cut about 2% of its workforce this month, while Citigroup (C) has also let some workers go, though the latter noted that it was merely part of usual yearly culling.

JPMorgan (JPM) and Bank of America (BAC) have taken a more cautious approach to potential job cuts.

"You need to be very careful when you have a bit of a downturn to start cutting bankers here and there, because you will hurt the possibility for growth going forward," JPMorgan President and Chief Operating Officer Daniel Pinto said during an investor conference in September.

Bank of America CEO Brian Moynihan said at a conference earlier this month that his institution will not lay people off but rather let natural attrition occur and let open positions go unfilled, or fill them internally.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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