Goldman Sachs CEO to Cut Over 1,300 Jobs in Annual Review Process

In a move to streamline operations and improve performance, Goldman Sachs CEO David Solomon has announced plans to slash more than 1,300 jobs as part of the bank's annual review process, according to sources familiar with the matter. The cuts are expected to affect between 3% and 4% of Goldman Sachs' workforce of 45,000 employees.

The layoffs have already begun and will continue throughout the fall as part of the bank's "strategic resource assessment" process. This yearly review allows Goldman Sachs to evaluate employee performance and make necessary adjustments to maintain a high level of efficiency and competitiveness.

While the job cuts are significant, Solomon emphasized that the bank's headcount is expected to be higher by the end of 2024 compared to the previous year. This aligns with Goldman Sachs' regular practice of reducing its workforce by 2% to 7% annually, taking into account various performance factors, market conditions, and financial outlook.

Last year, the bank implemented similar cost-cutting measures, resulting in 1% to 5% of employees losing their jobs. This year's layoffs mark a continuation of Goldman Sachs' efforts to optimize its operations and ensure sustainable growth.

The COVID-19 pandemic disrupted work patterns, leading to remote work arrangements for many companies, including major banks like Goldman Sachs. However, as firms start to transition back to in-office work, Goldman Sachs and other financial institutions are cracking down on employees who fail to consistently show up in person. This shift aligns with Solomon's statement in 2021 that teleworking was "an aberration" that the bank aimed to correct as soon as possible.

The job cuts come in the aftermath of Goldman Sachs' decision to let go of around 3,200 employees in January 2023, amidst a downturn in deal-making activities. The bank also reduced bonuses during that time. Despite concerns about a possible economic downturn and the forthcoming US election, there is hope for a strong rebound before the year ends.

Goldman Sachs reported a 21% increase in investment banking revenue for the second quarter of this year compared to the same period last year. CEO David Solomon expressed optimism, stating that the bank was witnessing the early stages of a capital markets and mergers and acquisitions (M&A) recovery.

Investors seemed to respond positively to the news, as Goldman Sachs shares turned positive and closed up 0.6% in afternoon trading. Year-to-date, the stock has surged nearly 32%, outperforming the broader market.

The job cuts announced by Goldman Sachs reflect the ongoing efforts of the bank to align its workforce and operations with changing market dynamics, ensuring long-term success and profitability.