Goldman Sachs boss unveils plan to cut jobs amid global economy fears – The Guardian

by | Dec 29, 2022 | Jobs

Goldman Sachs boss unveils plan to cut jobs amid global economy fearsCEO David Solomon said he will make cuts in January with reports claiming investment bank will axe about 4,000 posts Photograph: Avishek Das/SOPA Images/Rex/Shutterstock Photograph: Avishek Das/SOPA Images/Rex/ShutterstockThe boss of Goldman Sachs has told staff that he will make job cuts early next month, as the US investment bank seeks to improve its profits amid concerns over the global economy.The bank is reportedly considering cutting about 8% of its 49,000 employees, which could equate to as many as 4,000 job losses. It is also thought to be considering cuts to its bonus pool of up to 40%.It comes as the City of London prepares for a thinning of the ranks, with thousands of jobs expected to go. After a bumper year in 2022, teams working on mergers and takeovers are particularly at risk in the coming 12 months as interest rates rise, increasing the cost of borrowing the cash needed to fund new deals.Goldman chief executive, David Solomon, said the partnership was bracing for slower economic growth as central banks raise interest rates, in an annual recorded end-of-year message to staff first reported by Bloomberg News.Solomon said: “We are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January.”Goldman Sachs bankers brace for hefty cut to bonusesRead moreInvestment banks had enjoyed a boom year in 2021, as companies launched a huge wave of mergers and acquisitions after coronavirus pandemic lockdowns. Goldman Sachs and other banks expanded to take advantage, but the number of lucrative deals fell back in 2022 amid rising interest rates around the world.“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” Solomon said in the message. “For our leadership team, the focus is on preparing the firm to weather these headwinds.”Goldman is still forecast to report big profits for this year and next. Analysts surveyed by S&P Global Market Intelligence predict it will make $12bn (£10bn) in net profits for 2022, and $13bn in 2023.That would be bigger than any year since the global financial crisis in 2009, barring its record profits of $21bn in 2021. However, the bank has been under pressure to improve its stock market valuation, which is lower relative to some US investment bank rivals such as Morgan Stanley. Its share price has fallen by 14% during 2022.Completing job cuts in the first fortnight of January would allow Goldman executives to present them to investors on 17 January, when the bank will report its full-year 2022 results. Solomon is then also due to speak to investors in February about a restructuring plan he announced in October to try to improve its profitability.That plan – the second major reorganisation during Solomon’s four-year reign as chief executive – will entail merging two asset and wealth management divisions that he previously separated in 2019, and pulling back from its efforts to expand further into consumer banking under the Marcus brand.The bank’s investment strategists have predicted that better prospects for companies may be some way off. There will be “more volatility and declines during this bear market before reaching a low later in 2023” as interest rates peak and the worst of the expected recessions pass in economies around the world, they said.Goldman Sachs declined to comment.TopicsGoldman SachsJob lossesBankingGlobal recessionGlobal economyEconomicsnewsReuse this content …

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