Goldman Sachs, up 0.58%, plans to cut more than 1,300 jobs from its global workforce as part of an annual review process intended to fire underperforming employees.
The bank should reduce your workforce by 3% to 4%which would impact approximately 1,300 to 1,800 workerswhereas Goldman had approximately 45,300 employees late last year. These cuts will be implemented across several divisions of the bank, although some areas will see a greater impact than others.
In general, Goldman seeks to reduce between 2% and 7% of its workforce each yeardepending on different performance factors. This range has fluctuated over timeinfluenced by market conditions and the bank’s financial projections.
The layoffs have already started and will last until fallaccording to information from official sources. This measure is part of an annual evaluation procedure called “strategic resource assessment” (SRA).
Goldman spokesman Tony Fratto said: “Annual talent reviews are a common processstandard and not exceptional.” Furthermore, he indicated that it is expected that Goldman’s total headcount to be higher by end of 2024 compared to 2023, as indicated by The Wall Street Journal.
This annual dismissal process examines performance according to various measures, highlighting office presence as one of the key factors. During the pandemic and its subsequent phase, Goldman and other banks have relaxed their office work requirements. However, they are now more strict with employees who do not come regularly.
Goldman and JPMorgan Chase are among the banks that expect a large number of their employees to be in the office for most of the week.
Other major banks, such as JPMorgan and Citigroup, are also implementing initiatives to fire your least efficient employees every year.
Goldman had suspended its SRA program during the pandemic, when transactions were at a record number, but restarted it in 2022, a year in which layoffs were at the lowest end of their history.
In September of the same year, laid off several hundred employees and, in January 2023, eliminated approximately 3,200 positions, approximately 6% of its workforcebracing for more layoffs in May as transactions began to slow. Last fall, as part of its annual SRA program, it also made additional cuts.
Recently, a more stable outlook on interest rates gave Wall Street workers hope that the trade would end a years-long drought. However, a possible economic setback or political conflict could interrupt said activity at any timeThe imminence of the American presidential election has also given some leaders food for thought.
Goldman, for his part, refocused its operations on Wall Street after deciding to exit the consumer lending business.
Last month, Goldman reported a 21% increase in investment banking revenue in the second quarter compared to the previous year, and a 27% increase in revenue from its asset and wealth management division.
“What we observe indicates that We are in the early stages of a recovery in capital markets And in merger activities and acquisitions,” Goldman CEO David Solomon said on a call with analysts in mid-July.
Goldman layoffs They come against a backdrop of disappointing results in the bonus sector. For employees who participated in fewer transactions in 2023.
