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Wall Street giant Goldman Sachs plans to lay off 4,000 “underperforming” employees in January as it is hit by the harsh economic downturn.
Up to 8 percent of the bank’s workforce could be laid off after the firm asked managers to draw up a shortlist of candidates, the sources said. traffic light.
Experts said the layoffs will affect all divisions of the bank and will occur around January, the same time bonuses are usually distributed.
The layoffs would see the company cut its workforce of 49,100 for the first time since 2019, as its usual annual culling of two to five percent ground to a halt during the pandemic.
It comes amid a tumultuous year for the investment bank, which has seen its share price fall by more than 12 percent since December 2021.
Goldman Sachs is the latest major employer to seek to cut back on white-collar jobs after PepsiCo announced last week it would lay off hundreds in New York, Texas and Chicago.
Goldman Sachs plans to lay off about 4,000 people from its workforce of 49,100, an 8 percent cut amid a harsh economic downturn.
The company had enjoyed a growing workforce since CEO David Solomon (pictured) took over in 2018. The bank had halted its annual culls during the pandemic.
Even if Goldman Sachs cuts its workforce by 4,000 employees, it would still have more employees than in 2021.
The company has been on something of a hiring spree since CEO David Solomon took over in 2018, when Goldman Sachs retained 36,300 employee positions, the same as the year before.
The workforce then increased to 38,300 in 2019 and 40,500 the following year. After reaching 43,900 in 2021, the number rose by more than 5,000, one of the biggest spikes in the bank’s recent history.
Solomon, however, previously warned that the bank needed to cut costs, with the impending downsizing among long-planned initiatives to save money.
“We continue to see headwinds on our expense lines, particularly in the near term,” Solomon said while speaking at a conference last week. “We have put some cost mitigation plans in place, but it will take some time to see the benefits.
“Ultimately, we will continue to be agile and scale the company to reflect the opportunity set.”
Goldman Sachs declined to comment on the layoffs.
Solomon has watched money-saving measures as company shares have fallen more than 12 percent over the past year.
The investment bank layoffs would come as PepsiCo, Walmart, Gap, Zillow, Ford and Stanley Black & Decker have recently cut their white-collar workforce.
The industry-wide moves are raising fears that the US is racing towards a ‘white collar recession’.
In normal recessions, blue-collar workers tend to lose their jobs first, but now white-collar workers are facing massive layoffs.
A KPMG report said that more than half of US CEOs are considering job cuts in the next six months.
Dave Gilbertson, vice president of software maker UKG, told the financial times: ‘I wouldn’t be at all surprised if white-collar workers end up being the first to be laid off in a recession scenario.
US-based tech companies have cut more than 28,000 jobs so far this year, more than double the year before, according to a report by Challenger, Gray & Christmas, which tracks such ads.
‘If you look at where the layoffs have already taken place, you haven’t really targeted the blue collar markets yet. That’s because there is a very serious labor shortage in these blue collar positions.
Last month, goal, owner Facebook, instagram and WhatsApp, revealed that it will cut 13 percent of its workforce, while Elon Musk fired half of Twitter’s employees following its successful acquisition of the social networking site.
Experts have warned that industries are facing a “triple whammy” of economic slowdown, inflation and the end of pandemic-fuelled growth.
Overall, US-based tech companies have shed more than 28,000 jobs so far this year, more than double the year before, according to a report by Challenger, Gray & Christmas, which tracks such jobs. advertisements.
In October, layoffs rose 13 percent, the highest jump since February 2021. U.S. employers also eased hiring in November, and job creation slowed the most since January 2021.
Only 127,000 jobs were created last month, far less than analysts had expected and almost half the 239,000 jobs created in October.
Companies that enjoyed strong growth during the pandemic, particularly those in technology and e-commerce, are beginning to cut spending ahead of what CFOs fear are tough times.
Unemployment rates currently sit at 3.7 percent, according to US Department of Labor statistics..