New York/London/Hong Kong, Jan. 12 (Reuters) – Goldman Sachs (GS.N) began laying off Wednesday to push for drastic cost cuts, with about a third of its employees affected coming from its investment banking and global markets divisions, a source familiar with the matter said. said.
The Wall Street giant’s long-anticipated job cuts are expected to represent the biggest drop in headcount since the financial crisis. The cuts are likely to affect most of the bank’s major divisions, with the investment banking sector facing the most severe cuts, sources told Reuters this month.
slightly 3,000 employees A source who could not be named said on Monday. Another source confirmed Wednesday that the cuts had begun.
Goldman Sachs said in a statement Wednesday: “We know this is a difficult time for those leaving the company.
“We appreciate the contributions of all our employees and are providing support to ease their transition. It’s about sizing the company appropriately for the opportunities we have.”
This reduction is part of a broader cut across the banking industry. Possible global recession loom. At least 5,000 people have been cut off from various banks.Goldman’s 3,000 plus Morgan Stanley (MS.N) Chopped About 2% of its workforce, or 1,600, said HSBC sources last month. (HSBA.L) are falling out Sources say at least 200.
Paul Sobera, president of Wall Street recruitment firm Alliance Consulting, said last year was tough across the group, including credit, equities and investment banking. “A lot of people didn’t budget.”
“It’s just part of Wall Street,” Sobera said. “We are used to seeing layoffs.”
The cuts will reduce Goldman’s headcount by approximately 6% from 49,100 at the end of the third quarter.
The company’s workforce has added more than 10,000 jobs as the market has been booming since the coronavirus pandemic.
Cuts come as US banking giants projected Report a decrease in profit this week. Goldman Sachs is expected to report a net profit of $2.16 billion in the fourth quarter, compared with a net profit of $3.94 billion in the same period last year, according to average forecasts by analysts at Refinitiv Eikon. Since he has decreased by 45%.
Goldman Sachs shares have partially recovered from last year’s 10% decline. The stock rose 1.99% on Wednesday and is up about 6% year-to-date.
world layoffs
Goldman’s layoffs began in Asia on Wednesday, when Goldman Sachs completed the run-down of its private wealth management business and laid off 16 private banking staff at its offices in Hong Kong, Singapore and China, a person familiar with the matter said. Told.
About eight staffers have also been laid off at Goldman’s research arm in Hong Kong, with layoffs continuing at its investment banking and other divisions, the sources said.
At Goldman’s central London hub, rainfall has reduced the likelihood of staff gatherings. A few guards actively patrolled the entrance to the building, but few people entered or left the premises. A glimpse of the bank’s recreational area just beyond the lobby showed a handful of staff engaged in deep conversation, but there was little sign of drama. The eateries were also short on post-lunch deals. This is in stark contrast to the mass layoffs of the past, when it was common for unlucky staff to get together, console each other, and plan their next career move.
In New York, employees were seen flocking to headquarters during the morning rush hour.
Goldman’s layoff plans will be followed by a broader spending review of corporate travel and expenses, the Financial Times reported Wednesday.U.S. banks have cut back on corporate deals since the war in Ukraine. We are calculating the cost of a significant slowdown and slump in capital market activity.
The company has also cut its annual bonus payout this year, reflecting the downturn in the market, and payouts are expected to fall by about 40%.
Reporting by Sinead Cruz and Ian Withers of London, Serena Lee of Hong Kong, Scott Murdoch of Sydney and Saeed Azhar of New York. Edited by Josie Kao and Christopher Cushing
Our criteria: Thomson Reuters Trust Principles.