- Goldman Sachs has begun its planned layoffs of thousands of employees, a source told Insider.
- The company sent signals last month that the cuts came amid a drop in transactions.
- The move comes ahead of the industry’s spring bonus season.
Goldman Sachs is moving ahead with its announced plan to lay off thousands of employees as deals slowed from 2021, when the industry built up to meet demand.
On Wednesday, Goldman Sachs began conversations with employees affected by the layoffs, a source with knowledge of the situation told Insider. In total, the planned cuts will affect no more than 3,200 of the bank’s roughly 49,500 employees, the source said. This equates to a maximum of approximately 6.5% of Goldman’s global workforce.
Goldman Sachs declined to comment on the layoffs when contacted by Insider.
Goldman Sachs previously laid off employees from its media and technical teams, among others, Insider reported in September. Goldman’s consumer banking unit also faced mounting losses in 2022.
Layoffs on Wall Street tend to be timed to precede spring earnings and bonus season, freeing up employees before large sums are handed out. The bank is expected to release its fourth quarter 2022 results on January 17.
Wall Street cuts during downturns tend to affect highly paid executives as well as support staff like those who do research, administrative and technical work, said Jeanne Branthover, managing partner at recruiting firm DHR. Global, specializing in the placement of bankers and senior executives. senior executives in financial services companies.
“A lot of these companies have hired support teams for business developers and dealmakers, but things are changing quickly,” she said. Indeed, trading has slowed down sharply in 2022.
The cuts at Goldman follow layoffs across the tech industry that have seen engineers at Meta, Twitter and other companies lose their jobs in recent months.
A recent survey by accounting firm PricewaterhouseCoopers highlighted executives’ intention to cut costs to deal with rising interest rates and falling transactions from 2021 highs.
In PwC’s survey in November, more than 80% of the more than 650 executives who took part said they anticipated a recession and planned to cut their workforce. The survey report said there could be a circular effect to this approach as companies act in the same way on a large scale, manifesting the predicted downturn.
“When businesses pull back in anticipation of an economic downturn, they conserve cash and cut spending,” the report said. “When entire industries take this approach, they can create the very situation they hoped to avoid.”