Goldman Sachs is not the only company to participate in the latest round of Wall Street layoffs. Such banking giants as Morgan Stanley and JPMorgan Chase are also reducing their headcount.
Banking giant Goldman Sachs Group Inc (NYSE: GS) is reportedly planning to run a new round of layoffs. According to those familiar with the matter, the move will affect around 250 employees in senior positions. The plan to cut jobs results from the slowdown in Wall Street’s dealmaking and decrease in profits.
This is the third cut in less than a year for Goldman Sachs. The first round took place in September 2022 amid the restructuring process within the company. At that time, Goldman Sachs cut several hundred jobs, becoming one of the first Wall Street companies to reduce its staff as a cost-saving measure amid a decrease in dealmaking and trading activity.
Next, in January this year, Goldman Sachs announced a massive layoff of as many as 3,200 employees, which represented 6.5% of its total headcount. It turned out to be the biggest cut since the 2008 financial crisis. As of March 2023, Goldman Sachs had 45,400 employees. Apparently, following the cutting round, the revenue continued to go below estimates, therefore, Goldman Sachs is laying off again.
Notably, the company might conduct further layoffs if necessary in September.
After the first layoff round last year, Goldman Sachs CEO David Solomon stated:
“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity. We need to proceed with caution and manage our resources wisely.”
Commenting on the latest move, Solomon added:
“Even in the midst of a difficult operating environment, we continue to work hard to strengthen the firm. We know progress is never a straight line, but we’re excited about the opportunities ahead.”
Challenging financial conditions are rolling over into the global economy, affecting Wall Street’s mergers and acquisitions dealmaking. In 2022, fewer mergers, debt issues and public offerings led to a 56% drop in pretax profit in aggregate on Wall Street. This has led to a sharp decline in Wall Street bonuses. Compared to 2021, when bankers generated enormous personal rewards amid a deal-making frenzy, Wall Street’s 2022 average bonus paid to securities employees dropped to $176,700, a 26% decline from the previous year’s $240,400, according to New York State Comptroller Thomas P. DiNapoli’s annual estimate.
Wall Street’s Layoffs
Goldman Sachs is not the only company to participate in the latest round of Wall Street layoffs. Another banking giant Morgan Stanley (NYSE: MS) is reportedly planning to eliminate about 3,000 positions, or 5% of its headcount, by the end of June. The downsizing will mostly affect banking and trading staff.
Last week, it was revealed that JPMorgan Chase (NYSE: JPM) is also planning to cut 500 jobs among technology and operation units, as well as consumer banking, commercial banking, asset, and wealth management divisions. The company did not make an official announcement regarding the move, but those familiar with the matter said that along with layoffs, JPMorgan has over 13,000 job openings available.
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