Goldman Sachs Group (GS.N) will start laying off thousands of people across the firm from Wednesday, two sources with knowledge of the move said, as it gets ready for a tough economic environment.
Just over 3,000 workers will be terminated, one of the sources said, but the final number is yet to be confirmed. That scale of the cuts would be the greatest since the 2008 financial crisis, one of the sources said.
The sources could not be named as the information was not yet released to the public. Goldman Sachs would not comment. Bloomberg News reported on Sunday that Goldman would cut about 3,200 jobs.
Goldman had 49,100 employees at the end of the third quarter, after hiring significant numbers of staff during the coronavirus pandemic.
The job cuts are expected to affect most of the bank’s major divisions, but should focus on Goldman Sachs’ investment banking arm, one of the sources said. Wall Street banks have experienced a major slowdown in corporate deal-making activity due to volatile global financial markets.
Hundreds of people are also likely to be laid off from Goldman Sachs’ consumer business, Marcus, after it dialed back plans for the loss-making unit, the sources said.
The bank’s chief executive David Solomon sent a year-end voice memo to employees warning of a workforce reduction in the first half of this month, two separate sources said. Goldman Sachs would not comment on the memo.
These layoffs come ahead of the bank’s annual bonus payments which are usually given later in January and are expected to reduce by about 40%. The bank resumed its annual performance review process and layoffs in September after pausing for two years during the pandemic.
The Wall Street giant usually cuts about 1% to 5% of employees every year. These recent cuts will come in addition to the earlier layoffs.
Global banks, including Citigroup Inc (C.N) and Morgan Stanley (MS.N), have cut their workforces in recent months as a dealmaking boom on Wall Street faded due to high interest rates, the war between Russia and Ukraine, tensions between the United States and China, and soaring inflation.
Buy Crypto NowGlobal investment banking fees almost halved last year, with $77 billion raked in by the banks, down from $132.3 billion the previous year, according to Dealogic data.
The total value of mergers and acquisitions (M&A) globally had dropped 37% to $3.66 trillion by Dec. 20, Dealogic data showed, after reaching an all-time high of $5.9 trillion in 2022.
Banks had executed $517 billion worth of equity capital markets (ECM) transactions by late December last year, the lowest level since the early 2000s and a 66% fall from 2021’s bonanza, according to Dealogic data.
Despite the slowdown, Goldman’s top dealmakers told Reuters in recent interviews that they are optimistic about an M&A recovery in the second half of this year.
