U.S-based global investment bank Goldman Sachs is prepared to cut off over 3,000 of its workforce from Wednesday in reaction to a tough economic environment.
One of the two sources familiar with the decision confirmed that the final number is yet to be determined. This is expected to be the largest layoff since the 2008 financial crisis, the source said.
It was learnt that the layoffs are likely to affect most of the bank’s major divisions, but should centre on Goldman Sachs’ investment banking arm where fee income has fallen and its consumer arm, where it has scaled back ambitions for the underperforming Marcus brand. Wall Street banks have suffered a major slowdown in corporate dealmaking activity as a result of volatile global financial markets.
The 3,200 job losses would represent about 7% of the bank’s global workforce of 49,000. Bloomberg News, which first reported the proposed extent of the job cuts, said the bank would continue hiring at junior levels.
The bank’s chief executive David Solomon sent a year-end voice memo to staff warning of a headcount reduction in the first half of January. Although Goldman Sachs declined comment on the memo.
The job cuts come ahead of the bank’s annual bonus payments which are usually delivered later in January and are expected to fall about 40%.
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%.
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.
Solomon is expected to explain, in a separate investor day holding in February, a restructuring plan that he hopes will improve the bank’s performance.
Goldman Sachs was founded 154 years ago in 1869 by Marcus Goldman and his son-in-law Samuel Sachs.
One of the world’s largest investment banks, it has under it, a conglomerate of other firms including; Marcus by Goldman Sachs, Goldman Sachs Personal Financial Management, Goldman Sachs Capital Partners, and Goldman Sachs Ayco Personal Financial Management.
The Wall Street giant is headquartered at New York, U.S. with its operations extending to the world at large.
