Goldman Sachs is the first significant Wall Street company to act to cut costs with a drop in deal volume, and it plans to shed several hundred workers this month.The potential for layoffs to resume this year coincides with a sharp decline in income. The Wall Street behemoth managed by David Solomon posted second-quarter earnings of $2.93 billion, a sharp decline from the bank’s $5.49 billion second-quarter 2021 record.
According to a person with firsthand knowledge of the issue, the bank is resuming a tradition of annual staff culls that historically targeted 1% to 5% of weaker performers in positions across the company. The New York-based company, which had 47,000 employees at the halfway point of the year, would have to make several hundred job losses if the predicted cull were to be at the lower end of that range. Regarding its ambitions, Goldman declined to provide an on-the-record statement. The New York Times previously reported on the timing of the cuts.
The Wall Street Journal reported, “Chief Financial Officer Denis Coleman said at the time that the bank would slow its pace of hiring and would be slower to replace departing staff as a result of economic uncertainty.” “There’s no question that economic conditions are tightening to try to control inflation, and as economic conditions tighten, it will have a bigger impact on corporate confidence and also consumer activity in the economy,” Chief Executive David Solomon said on a conference call with analysts in July. “I think it’s hard to gauge exactly how that will play out, and so I think it’s prudent for us to be cautious.”
JPMorgan Chase and Morgan Stanley both announced unexpectedly severe profit declines over the summer. JPMorgan disclosed that in the most recent quarter, investment banking fees fell 54%. According to Morgan Stanley, its underwriting fees for equities were down 86%.
