Goldman Sachs will lay off as many as 3,200 employees this week as an uncertain economic and market climate pushes the bank to hunt for cost savings, according to a person familiar with the matter.
More than a third of the job cuts are expected to be from the firm’s trading and banking units, the person said. Like its Wall Street rivals, Goldman Sachs has been hit by a slump in global dealmaking 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 person 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 banking boomed.
But the mood on Wall Street has deteriorated since the Federal Reserve and other central banks started aggressively raising borrowing costs in a bid to rein in inflation. Companies are looking to conserve cash in case interest rate hikes trigger a global recession, and the appetite for mergers and acquisitions and initial public offerings has dried up.
That’s hurt companies like Goldman Sachs that advise on these transactions. The bank’s revenue during the third quarter of 2022 dropped 12% from a year ago. Investment banking revenue plunged 57% year-over-year.
In October, the firm announced that it would streamline operations, combining its trading and investment banking divisions and folding its digital consumer bank Marcus into its wealth management business.
Shares of Goldman Sachs were up less than 1% in premarket trading Monday. Last year, they fell about 10%, outperforming the broader S&P 500 index.
The layoffs come as blue-chip companies gear up for what’s expected to be a tumultuous year. Amazon (AMZN) said earlier this month that it plans to lay off more than 18,000 employees. Other banks, including Morgan Stanley (MS), have also laid off staff as the business environment has soured.