NEW YORK — Goldman Sachs Group is embarking on its biggest streak of job cuts since the pandemic began.
The Wall Street titan plans to cut several hundred positions starting this month, according to people with knowledge of the matter. Although the total number is lower than some previous cycles, the cuts are a resumption of Goldman’s annual culling cycle that it had largely halted during the pandemic.
The banking baron’s passing is the surest sign yet of a chill that has set in in the industry amid falling revenues after record years.
Analysts expect the bank to post a more than 40% drop in profits this year, according to data compiled by Bloomberg.
The New York-based company said in July it planned to slow hiring and reinstate annual performance reviews – foreshadowing job cuts it planned to undertake later in the year. It’s an effort to rein in spending in what he called a “challenging operating environment.”
Appraisals are typically used to weed out underperforming staff. Goldman could also reduce the pace of replacing staff it is losing to attrition, chief financial officer Denis Coleman said at the time.
Goldman had 47,000 employees at the end of the second quarter, up from 39,100 two years earlier, helped by recent acquisitions.
The New York Times reported earlier Monday that Goldman was plotting job cuts. A Goldman spokeswoman declined to comment.
Like its rivals on Wall Street, Goldman has been hurt by the dramatic downturn in investment banking, as the volatility that boosted trading gains also weighed on capital markets and asset management. While the firm’s trading operations saw a 32% increase in revenue in the second quarter, investment banking revenue fell 41%, reflecting a sharp decline in subscriptions.
Total operating expenses fell in the second quarter from a year earlier as Goldman cut compensation and benefits, but the company also reported cost increases due to growth initiatives.
Goldman shares are down more than 10% this year and about 15% from a year ago. That compares to a 7.5% decline in the S&P 500 Financials index over the past 12 months. BLOOMBERG