Goldman Sachs is weighing a fresh round of job cuts amid a prolonged decrease in dealmaking that has hit profits at the investment bank, according to people familiar with the matter.
Plans are being made to eliminate fewer than 250 jobs across the bank, primarily at the senior level including managing directors, one of the people said.
The prospective move would follow deeper cuts in January of roughly 3,200 jobs, or 6.5 per cent of its employees, leaving a workforce of about 45,000 employees worldwide.
Chief executive David Solomon told a private gathering of Goldman executives in January that he had erred by not cutting jobs sooner, the Financial Times has reported.
The new potential round of job losses was first reported by The Wall Street Journal.
Goldman in February outlined $1bn in savings, including $600mn from the earlier job cuts and from limiting replacement hiring.
The bank may also look to do another round of performance-based reductions in September, the people said. This review was an annual practice at Goldman, as at many other Wall Street banks, but was paused during the coronavirus pandemic.
The possibility of fresh jobs cuts underscores a sluggish first few months of 2023 for Wall Street. Corporate merger activity is off to the weakest start in a decade, dampening the amount investment banks earn from fees.
Dealmaking had already slowed in 2022, but Wall Street executives had expressed optimism that the market could rebound in 2023. However, rising interest rates, an uncertain economic environment and recent stress in the banking industry have curtailed many companies’ ability to do transactions.
Goldman’s first-quarter profit dropped 18 per cent year on year, with investment banking revenue falling 26 per cent from a year earlier.
Morgan Stanley this month eliminated several thousand jobs while Lazard, the boutique investment bank, in April said it would cut 10 per cent of its staff over the course of 2023, blaming a slowdown in deal activity.
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