Goldman Sachs is planning to lay off between 3% and 4% of its workforce, which equates to about 1,300 to 1,800 employees. These layoffs are part of the bank’s annual review process, which typically results in a reduction of employees who are deemed underperforming. The layoffs have already begun and will continue through the fall, impacting various divisions across the bank.
A spokesperson for Goldman Sachs, Tony Fratto, emphasized that these layoffs are a standard part of the bank’s annual talent review and should be seen as routine. Despite the layoffs, Fratto mentioned that Goldman Sachs expects its total headcount to be higher at the end of the year compared to 2023. This indicates that the bank is still growing in some areas, even as it trims its workforce in others.
Goldman Sachs’ annual review process historically cuts between 2% and 7% of its workforce, with the percentage varying based on the bank’s financial outlook and market conditions. For example, last year the bank laid off about 6% of its employees, with additional cuts occurring in May and later in the fall. This practice is not unique to Goldman Sachs, as other major banks also have similar programs to manage underperforming staff.
In the broader banking industry, job cuts have been prevalent as banks seek to control costs amidst economic uncertainty. Earlier this year, U.S. banks collectively reduced more than 5,000 jobs during the first quarter, with Citigroup making the largest cuts. These reductions reflect the ongoing challenges and restructuring efforts within the banking sector as institutions adjust to changing economic conditions and focus on profitability.
Goldman Sachs, while reducing its workforce, is also shifting its focus towards investments and market-oriented activities. The bank has recently sold its GreenSky platform and continues to move away from consumer banking.
Additionally, Goldman Sachs economists have lowered the likelihood of a recession to 20%, citing positive economic indicators like retail sales and unemployment claims. They suggest that if upcoming economic data is favorable, the recession probability could be reduced further.
