Goldman Sachs Layoffs May Reach 4,000 Across Firm

Goldman Sachs layoffs reportedly may reach as many as 4,000 employees.

Reuters reported Friday (Dec. 16) that these planned cuts follow the firm’s laying off 500 employees in September and its intentions reported earlier this week to cut hundreds of staff related to its retail banking business — a number that is included in the larger figure reported Friday.

This is a trend seen throughout Wall Street in which global banks Morgan Stanley and Citigroup reduced their ranks in recent months. The report attributed this to the challenging macroeconomic environment in which there are fewer mergers and share offerings happening amidst high interest rates, global tensions and rising inflation.

The moves at Goldman Sachs come just a year after a booming 2021 in which some investment bankers earned bonuses of as much as 50%, according to the report.

“GS [Goldman Sachs] needs to show that its costs are as variable as its revenues, especially after a year when it provided special rewards to top managers during the boom times,” Wells Fargo banking analyst Mike Mayo told Reuters.

A Goldman Sachs spokesperson told PYMNTS the firm has no comment on the report.

Citi reportedly scaled back its investment banking unit’s staff in November, eliminating dozens of jobs.

“We obviously will look at how the wallet continues to evolve and are very disciplined as it relates to expenses … [We are] very focused on ensuring that we have productive talent in our business,” Citigroup Chief Financial Officer Mark Mason told Bloomberg for the Nov. 8 report.

As PYMNTS reported Dec. 13, investment bank layoffs have hit Europe’s financial centers too.

Citi, Barclays, Credit Suisse, Deutsche Bank, Lloyds and UBS are among those that have axed staff with their investment banking teams as European operations have been especially hard hit by weak performance in the investment banking and institutional client services business.

Behind these job cuts is the fact that 2022 has been a bad year for deal making. Investment banking essentially boils down to enabling large corporate transactions. This means that when businesses do less business, banks make less money.