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Goldman Sachs unveils plan to cut jobs amid global economy fears
Goldman Sachs unveils plan to cut jobs amid global economy fears
The boss of Goldman Sachs has told staff that he will make job cuts early next month, as the US investment bank seeks to improve its profits amid concerns over the global economy, the media reported.
London: The boss of Goldman Sachs has told staff that he will make job cuts early next month, as the US investment bank seeks to improve its profits amid concerns over the global economy, the media reported.
The bank is reportedly considering cutting about 8 per cent of its 49,000 employees, which could equate to as many as 4,000 job losses. It is also thought to be considering cuts to its bonus pool of up to 40 per cent, The Guardian reported.
It comes as the City of London prepares for a thinning of the ranks, with thousands of jobs expected to go. After a bumper year in 2022, teams working on mergers and takeovers are particularly at risk in the coming 12 months as interest rates rise, increasing the cost of borrowing the cash needed to fund new deals.
Goldman chief executive, David Solomon, said the partnership was bracing for slower economic growth as central banks raise interest rates.
Solomon said: "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," The Guardian reported.
Investment banks had enjoyed a boom year in 2021, as companies launched a huge wave of mergers and acquisitions after coronavirus pandemic lockdowns.
Goldman Sachs and other banks expanded to take advantage, but the number of lucrative deals fell back in 2022 amid rising interest rates around the world.
"There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity," Solomon said in the message.
"For our leadership team, the focus is on preparing the firm to weather these headwinds."
Goldman is still forecast to report big profits for this year and next.
Analysts surveyed by S&P Global Market Intelligence predict it will make $12 billion in net profits for 2022, and $13 billion in 2023, The Guardian reported.
That would be bigger than any year since the global financial crisis in 2009, barring its record profits of $21 billion in 2021.
However, the bank has been under pressure to improve its stock market valuation, which is lower relative to some US investment bank rivals such as Morgan Stanley.
Its share price has fallen by 14 per cent during 2022, The Guardian reported.
