Goldman Sachs to lay off up to 3,200 workers this week

Goldman Sachs will lay off up to 3,200 employees this week as an uncertain economic and market climate prompts the bank to seek cost savings, according to a person familiar with the matter.

More than a third of the job cuts are expected to come from the company’s commercial and banking units, the source said. Like its Wall Street rivals, Goldman Sachs has been hit by a slump in global business activity as fewer companies merge or seek to raise capital.

Hiring for roles in other areas will continue and the new analyst class will start later this year as planned, the source added. News of the layoffs was first reported by Bloomberg.

The bank declined to comment.

Goldman Sachs (GS) had 49,100 employees at the end of the third quarter. It added thousands of jobs to its headcount during the pandemic recovery as markets and investment banks boomed.

But the mood on Wall Street has deteriorated since the Federal Reserve and other central banks began aggressively raising borrowing costs in a bid to curb inflation. Companies are looking to save money in case rising interest rates trigger a global recession and the appetite for mergers and acquisitions and initial public offerings has dried up.

That hurt companies like Goldman Sachs, which advise on such transactions. The bank’s revenue during the third quarter of 2022 was down 12% year-over-year. Investment banking revenue declined 57% year-over-year.

In October, the company announced it would streamline operations, combining its trading and investment banking divisions and incorporating its Marcus digital consumer bank into its wealth management business.

Goldman Sachs shares rose less than 1% in premarket trade on Monday. In the past year, they’ve fallen about 10%, outperforming the broader S&P 500 index.

The layoffs come as top-tier companies prepare for what is expected to be a tumultuous year. Amazon said earlier this month that it plans to lay off more than 18,000 employees. Other banks, including Morgan Stanley, also laid off staff due to the deteriorating business environment.