Goldman set to axe 3,200 jobs from tomorrow

Hundreds of Goldman Sachs employees in London could be left without a job tomorrow if it cuts its global workforce.

The investment bank plans to cut about 3,200 jobs — or 6.5 percent of its 49,000 employees — as it cuts costs in the face of the growing economic gloom.

The cull at the Wall Street giant begins tomorrow.

This is bad news for the bank’s 6,000 London-based employees and will undoubtedly dampen an already despondent mood in the City.

Dealing has dried up on both sides of the Atlantic as skyrocketing inflation, rising interest rates and volatility in financial markets take their toll.

The total value of global M&A fell by nearly 40 percent to around £3.1 trillion in 2022, down from a record £4.9 trillion during the pandemic-era deal bonanza in 2021, according to data from market platform Dealogic .

Reports suggest that Goldman’s investment banking arm will be particularly hard hit by the job cuts, as the slump in activity in the capital markets means lower transaction fee revenues.

Hundreds of jobs will also be cut in the loss-making consumer business after the bank scaled back plans for its Marcus retail unit.

Goldman CEO David Solomon warned staff in his annual end-of-year letter in December of imminent job losses.

He said the company faced several challenges, including “tightening monetary conditions” that caused an economic slowdown.

Goldman’s workforce has grown about 34 percent since Solomon took over in 2018, about twice as fast as its main competitors as it strives for growth during the pandemic.

Mark Freebairn, a partner at executive recruitment firm Odgers Berndtson, said given concerns about a global recession “it’s not surprising to see them [Goldman] act aggressively and quickly at this point, as the cost savings are likely to be felt only in the second half of the year.”

While the cuts reflect ongoing concerns about the state of the global economy, Freebairn said the cut was 6.5 percent lower than initial reports, which had predicted up to 10 percent of jobs could be cut.

London bankers are bracing for a bleak year. Inflation has made life harder for businesses, prompting central banks to raise interest rates.

This makes it more difficult to use debt to finance acquisitions. The domino effect on investment banks has been grim. Fees are nearly halved to £63.4bn by 2022, up from £109bn a year earlier, data from Dealogic showed.