Goldman Sachs is planning to lay off upwards of 3,900 representatives beginning in January as CEO David Solomon looks to help the bank benefit in the midst of financial headwinds.
The bank is now planning to slash staff numbers across the board after it went through a hiring spree in 2019, the current staff figures are at 49,100 for this year from 38,300 at the end of 2019
Wall Street is fighting with strongly decreased dealmaking and capital business sectors after a 2021 bull run that brought about huge recruiting floods and enormous rewards. Investment banking fees have tumbled 35 percent in the year to date.
Goldman is feeling the squeeze to improve the business’s overall numbers so that it can compete competitively with others in the market.
The bank declared a significant internal restructuring in October that included a merger of the investment banking and trading division, as well as a drawback from consumer banking which underperformed.
Solomon will now focus on Asset and Wealth management, and transaction banking.
Reducing costs is fundamental for the bank after net benefits slid 44% in the initial nine months of the year. The shares have fallen approximately 10% this year.
David Solomon, CEO of Goldman Sachs commented on the matter,
“We continue to see headwinds on our expense lines, particularly in the near term,” he said. “We’ve set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set.”
Additionally, there have been reports that it is planning the slash pay of a portion of remaining employees and reduce bonuses, for example, the bonus pool for its 3,000 investment bankers will be cut by 40 percent or more, which brings back memories of the 2008 crisis which was the last time that happened.
