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Goldman Sachs has begun cutting 3,200 jobs, laying off workers at its New York, London and Hong Kong offices in just 30 minutes.
When the mass layoffs began on Wednesday, many employees were laid off without even receiving bonuses for their work in 2022, the financial times reports.
Employees were reportedly fired via meetings and phone calls, with their office credentials deactivated as they were escorted out of the buildings. The company will also mail personal items to laid-off workers who were not in the office.
The investment banking giant is on the verge of laying off about 6.5 percent of its 49,000 workforce as Chief Executive Officer David Solomon looks to cut spending amid shrinking revenue.
“We know this is a difficult time for people leaving the company,” Goldman Sachs said in a statement. ‘We are grateful for all the contributions from our people and are providing support to ease their transitions.
“Our focus now is to right-size the company for the opportunities that lie ahead in a challenging macroeconomic environment.”
Goldman Sachs began cutting 3,200 jobs on Wednesday as CEO David Solomon (pictured) looks to cut spending as banks recover from a tough 2022
Goldman Sachs’ workforce skyrocketed to 49,100 last year. Even if the company lays off 3,200, it will still have more employees than in 2021
Pictured: Employees at Goldman Sachs’ New York office on Wednesday as the first round of layoffs began. Employees were reportedly fired in short meetings and without bonuses.
Sources told the Times that while the bonuses have been withheld, many of the sacked senior managing directors will still be paid until the end of January, after which they will receive a three-month severance package.
As for the younger employees, those at the vice president level and below, they were offered just two months’ severance, the sources said.
Some Goldman Sachs employees have said the lack of bonuses this year could be a ploy by the bank to get more workers to quit, allowing them to avoid severance pay while cutting more jobs.
About a third of the layoffs came from the investment banking and global markets division, and some of the laid off employees also relied on work for their visas.
Shilpi Soni, a former software engineer at the company, said that after being fired from the company, she is desperate to find a new job so she can stay in the US.
“I just want to share how quickly life can change,” he wrote on LinkedIn. ‘I am proud to be the first person in my family to earn a master’s degree in a foreign country.
‘I come from a rural family, so it’s been a rollercoaster ride, overcoming social and financial restrictions to come here. Knowing where I started from, getting fired hurts.
Shubham Sahu, 23, said he was sacked just after his birthday, writing: ‘Wow, this really is a different way to start a year…’
Many of the canned employees shared their disbelief on LinkedIn, while others noted that their visas were in jeopardy after suddenly losing their jobs.
Another software engineer, Raunak Narayan, said his entire team was laid off, writing: ‘My current employer, Goldman Sachs, laid off my entire team (some of the best people I’ve ever worked with) and left the project. Putting myself in vehement danger.
Claire Davis, a former member of the banks’ product management division, said morale may be low for employees who flood LinkedIn.
“To my colleagues at Goldman Sachs who have been affected, I stand with you,” he wrote. “I’m happy to help review resumes, take a call, or grab a cup of coffee.”
The Goldman layoffs began in Asia on Wednesday, where the company completed the winding down of its private wealth management business.
It ultimately laid off 16 private bank employees at its Hong Kong, Singapore and China offices, a source with knowledge of the matter said.
About eight employees were also laid off at Goldman’s Hong Kong research department, the source added, with layoffs underway in investment banking and other divisions.
Layoffs began in Asia, including at Goldman Sachs, its Hong Kong branch (above).
The UK also saw employees leave their London office (above) to console themselves in local pubs.
At Goldman’s central London hub, rain diminished the possibility of staff meetings.
Several security personnel were actively patrolling the entrance to the building, but few people were entering or leaving the property.
A look at the bank’s recreation area, beyond its lobby, showed a handful of employees in deep conversation, but little sign of drama.
However, in the Harrild & Sons pub near the bank’s Plumtree Court offices, some of the sacked employees gathered to console each other.
In New York, employees were seen arriving at the headquarters during the morning rush hour.
Banks generated nearly $71 billion in investment banking revenue in the US last year, according to Dealogic. Investment banking revenue in the United States is expected to have fallen more than 50 percent from last year.
Goldman Sachs shares fell sharply on Wednesday after reports of the layoffs.
Last month, CEO Solomon reportedly sent out a memo to staff by the end of the year, warning that headcount would be downsized in the new year.
“We are conducting a careful review and, while discussions are still ongoing, we anticipate that our reduction in staff will take place in the first half of January,” Solomon said in the memo, according to Bloomberg.
‘There are a variety of factors affecting the business outlook, including tightening monetary conditions that are slowing economic activity. For our leadership team, the focus is on preparing the company to weather these headwinds,” he added.
Goldman Sachs had significantly increased its workforce since 2020 as it sought growth opportunities following the pandemic.
However, institutional banks have been affected by a significant slowdown in activity in recent months due to the volatility of global financial markets.
Annual bonus season will kick off this week when JP Morgan, Citi and Bank of America report their results for last year.