September 27, 2023

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People familiar with the matter said Goldman Sachs is preparing to implement another round of job cuts for worst-performing employees, which could happen as early as next month.

The planned move is part of an annual exercise that typically results in 1 percent to 5 percent of employees company-wide losing their jobs. Goldman is targeting a number at the low end of that range in parts of its core investment banking and trading businesses and aims to begin that process in late October, the people said.

That one percent of Goldman’s total workforce, which includes asset and wealth management as well as operational roles, would equate to about 440 jobs.

The so-called strategic resource allocation was put on hold during the coronavirus pandemic until last year, when job losses also hit historic lows.

The people said Goldman managers have drawn up a list of employees who could be fired. The people said the final number is still being decided and any workers who leave before employees are notified of the layoffs could be impacted, resulting in fewer job cuts.

Goldman declined to comment.

Goldman has eliminated thousands of jobs this year. It cut about 3,200 jobs, or 6.5 percent of its workforce, in January in an effort to cut costs following a dramatic slowdown in investment banking activity and losses in its consumer banking business. Many senior officers have also left the bank.

Salaries at the bank were too low for 2022, and the combination of dismissals and meager bonuses has hit morale. Chief executive David Solomon has also faced media coverage critical of his leadership.

In an interview with CNBC on Thursday, Solomon said, “The caricature that is painted [of me] That’s not who I recognize”.

Solomon said, “I understand why it’s interesting to the media, but the people at Goldman Sachs don’t care.”

He acknowledged that “the first meaningful decline in our compensation in more than a decade” in 2022 has contributed to discontent at the bank.

Goldman’s net profit fell 35 percent in the first six months of 2023 and employees faced another dismal year for pay.

People familiar with the matter said senior Goldman executives have spoken with employees and told them the bank may be willing to give a higher share of profits to employees this year. Goldman has yet to draw up detailed compensation plans and that process will begin only at the end of the year.

Goldman is working to scale down its ambitions in consumer banking after years of losses and is pushing growth plans in stable businesses such as asset and wealth management. But analysts believe these activities far outweigh the profits and revenues at rival investment banking and trading.


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