<p class=”MsoNormal”>Goldman Sachs Group Inc., a global investment banking giant, is set to begin one of its most extensive job cuts this week, planning to eliminate around 3,200 positions to fight worsening economic conditions and reduce operating costs.</p><p>Goldman Sachs Cuts Jobs Like in Post-Lehman Brothers Era</p><p class=”MsoNormal”>As Bloomberg reported, the layoff process will begin in the middle of this week and the reduction will not exceed 3,200 <a href=”https://www.financemagnates.com/tag/jobs/” target=”_blank” rel=”follow”>jobs</a>. Earlier, it <a href=”https://www.financemagnates.com/institutional-forex/goldman-sachs-may-start-new-year-with-4000-job-cuts/” target=”_blank” rel=”follow”>suggested </a>that staff cuts could be as high as 8%, translating to 4,000 positions. However, the final reduction should be visibly lower due to decisions made by top managers who were asked last year to identify cost-cutting opportunities.</p><p class=”MsoNormal”>More than 30% of the reductions will come from core banking and trading units, showing the decision’s high importance and broad nature. However, Goldman Sachs is not alone in the cost-cutting field. 2023 began with massive layoffs in many sectors of the US economy as companies feared the specter of an impending recession.</p><p class=”MsoNormal”>”We are conducting a careful review, and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January,” David Solomon, the Group’s Chief Executive Officer, commented in the annual year-end letter.</p><p class=”MsoNormal”>Solomon confirmed that the cuts would be driven by deteriorating economic conditions and tightening monetary conditions due to the Federal Reserve’s current interest rate tightening cycle.</p><p class=”MsoNormal”>Since 2018, Goldman Sachs’ headcount has increased by 34%, reaching 49,000.</p><p>$2B in Pretax Losses for Goldman Sachs’ New Unit?</p><p class=”MsoNormal”>In addition to the <a href=”https://www.financemagnates.com/tag/cuts/” target=”_blank” rel=”follow”>job cuts</a>, Goldman Sachs is expected to unveil the financial results of its new Platform Solutions unit this week, which was created from the <a href=”https://www.financemagnates.com/terms/m/merger/” target=”_blank” id=”7631c19b-b9f3-43ee-a0cf-d4f8094270bc_1″ class=”terms__main-term”>merger</a> of its instalment-lending and credit cart business. According to Bloomberg, the branch is expected to report $2 billion in pretax losses. The negative result was increased significantly by provisions for credit losses. This new accounting rule forces companies to set aside a larger stockpile of funds when loan volumes rise.</p><p class=”MsoNormal”>Analysts expect the Group to report profits down 46%, on about $48 billion in revenue. However, the slump could have been even worse without the strong performance of the trading division, which ended another year in a row with a significant jump.</p><p class=”MsoNormal”>Goldman Sachs’ last published financial report was for the third quarter of 2022 and showed a drop in net income of about 44% compared to the same quarter in 2021. However, this does not change the fact that the annual revenue forecast for Goldman Sachs aims for the highest result in its history.</p><p class=”MsoNormal”>In October, Reuters reported that Goldman Sachs <a href=”https://www.financemagnates.com/fintech/goldman-sachs-to-combine-trading-operations-others-to-boost-revenue/” target=”_blank” rel=”follow”>plans to merge</a> its trading and investment banking business to maximize revenue.</p>
This article was written by Damian Chmiel at www.financemagnates.com.
