Goldman Sachs employees may need to brace for Round 4.
The bank is preparing to cut between 1% and 5% of its workers — those categorized as bottom performers — as soon as late October, the Financial Times reported, citing people familiar with the matter.
Final numbers are still being decided, the sources said. But Goldman is targeting a cut closer to the 1% end at parts of its core functions such as investment banking and trading, the Financial Times reported. A 1% across-the-board cut would encompass roughly 450 people.
The bank counted 48,500 employees as of December, according to its annual report. Since then, the firm cut roughly 3,200 positions in January, and trimmed another 250 or so in the weeks after Memorial Day — including roughly 125 managing directors.
Goldman began trimming its headcount in September 2022, months after it said it would slow hiring and reinstate annual performance reviews, which had been paused in the immediate aftermath of the COVID-19 pandemic.
Managers across the bank have drafted lists of employees who may be let go, the Financial Times’ sources said. But the final tally could be affected by employees who quit before the cull is relayed to staff, the people added.
Goldman declined to comment to the Financial Times. But the bank’s CEO, David Solomon, bemoaned his treatment in the press in an interview Thursday with CNBC.
"I don't recognize the caricature that's been painted of me. I have a lot of colleagues and clients I talked to, they don't recognize that caricature either,” Solomon told the network. “I understand why it’s interesting to the media, but it’s not what the people at Goldman Sachs are focused on.”
As 2023 has worn on, reports of discord at the bank have proliferated — many centering on disagreements over Solomon’s leadership.
The CEO reportedly told a private meeting with Goldman’s 400 or so partners in February that he erred by waiting until January to launch the bank’s biggest layoff round. Morale has dipped, too, as the bonus pool for partners fell by about 50% last year.
Goldman launched a reorganization last October that de-emphasized its recent tangent into consumer banking. The bank aims to sell installment lender GreenSky, which it bought less than two years ago. Goldman is also reportedly considering offloading its Apple credit card and high-yield savings account products. And the bank last month sold a piece of its wealth-management business.
Even in its core pursuits, 2023 has been a down year for Goldman. The bank lost its title as the world’s top mergers-and-acquisitions adviser — that crown now belongs to JPMorgan Chase — amid a 42% decline in M&A volume market-wide in the first half of the year. Net profit at Goldman, in the same time frame, has fallen 35%.
Goldman has seen a rash of exits, too, by top executives — punctuated in July by the departure of Julian Salisbury, the bank’s co-head of asset management. Solomon, for his part, told CNBC the recent volume of departures by partners is “absolutely typical.”
Some partners this winter reportedly considered bringing their concerns about Solomon directly to the bank’s board, but they’ve hesitated, on the thinking that the board may be out of touch with Goldman’s day-to-day operations, sources told Business Insider.
