Goldman Sachs is planning to fire hundreds of employees after reviews returned this July since being suspended during the height of the coronavirus pandemic, the New York Times reported.
Goldman generally reviews its employees’ performance once a year, leading to layoffs of 1% to 5% of employees, with the current round of layoffs to be closer to 1%, the New York Times reported, citing anonymous sources familiar with the matter. Goldman Sachs had 47,000 employees as of June, according to the Wall Street Journal, so a 1% cut would lay off approximately 500 employees. (RELATED: ‘Whiplash’: Economists Warn The Labor Market Is The Next Victim Of Inflation)
“No question that the market has gotten more challenging,” said CEO David M. Solomon, on an investor’s call in July, according to the NYT. “We have made the decision to slow hiring velocity and reduce certain professional fees going forward. We are keeping in mind, however, that while we’re being disciplined about our expenses, we are not doing so to the detriment of our client franchise or our growth strategy.”
Goldman Sachs is planning layoffs, the recession is here pic.twitter.com/3sXGzQpQYT
— Heidi N. Moore (@moorehn) September 12, 2022
The company’s profit fell almost in half as revenue plummeted in the second quarter by 41% year-on-year, the WSJ reported. Solomon urged caution as inflation remained high, predicting that tightening economic conditions would lead to reduced economic activity by corporations and consumers alike, in a July conference call with analysts.
Goldman is not the only major corporation to have announced significant layoffs this year, with social media giant Snap cutting over 1200 employees (20% of its workforce), furniture company Wayfair cut 870 employees (5% of its workforce), exercise bike producer Peloton cutting over 4,000 employees in a year, according to Business Insider. JP Morgan fared worse than Goldman, cutting more than 1,000 employees this year in home-lending alone, with Wells Fargo acknowledging but declining to number the amount of layoffs that have occured this year, Business Insider reported.
The financial giant’s cuts come as the Federal Reserve predicts that high prices as a result of inflation are likely to continue through the end of the year. Despite this, companies have been optimistic about high-value deals, such as the upcoming initial public offering of Porsche, indicating that there is a potential that banks may be overcorrecting, the NYT reported.
Deal-making reached record levels during the pandemic, and led to Goldman increasing its staff by 6,000 from 2021 to 2022, according to the WSJ. Even at these elevated levels, Goldman bankers were complaining that they were overworked, according to the NYT.
Goldman Sachs did not immediately respond to the Daily Caller News Foundation’s request for comment.
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