Goldman Sachs to lay off up to 3,200 workers this week


London
CNN

Goldman Sachs will lay off up to 3,200 employees this week as an uncertain economic and market climate pushes the bank to seek cost savings, according to a person familiar with the matter.

More than a third of the job cuts are expected to be in the company’s business and banking units, the person said. Like its Wall Street rivals, Goldman Sachs has been hit by a slump in global trading activity as fewer companies merge or seek to raise capital.

Hiring for positions in other areas will continue and the new class of analysts will start later this year as planned, the person added. News of the layoffs was first reported by Bloomberg.

The bank declined to comment.

Goldman Sachs (GS) had 49,100 employees at the end of the third quarter. It added thousands of jobs to its workforce during the pandemic recovery as markets and investment banking boomed.

But the mood on Wall Street has soured since the Federal Reserve and other central banks began aggressively raising borrowing costs in an effort to contain inflation. Companies are looking to conserve cash in case rising interest rates trigger a global recession, and the appetite for mergers and acquisitions and IPOs has dried up.

This hurts companies like Goldman Sachs who advise on these transactions. The bank’s revenue in the third quarter of 2022 fell 12% from a year ago. Investment banking revenue fell 57% year-on-year.

In October, the company announced it would streamline its operations, combining its trading and investment banking divisions and integrating its digital consumer bank Marcus into its wealth management business.

Goldman Sachs shares rose less than 1% in premarket trading on Monday. Last year they fell around 10%, outperforming the broader S&P 500 index.

The layoffs come as blue chip companies prepare for what is expected to be a tumultuous year. Amazon (AMZN) said earlier this month that it planned to lay off more than 18,000 employees. Other banks, including Morgan Stanley (MS), also laid off staff as the business environment deteriorated.

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