Current:Home > InvestGoldman Sachs is laying off as many as 3,200 employees this week -Prime Capital Blueprint
Goldman Sachs is laying off as many as 3,200 employees this week
Algosensey View
Date:2025-04-11 05:22:33
At Goldman Sachs, the New Year is starting with thousands of job cuts.
One of Wall Street's biggest banks plans to lay off up to 3,200 employees this week, as it faces a challenging economy, a downturn in investment banking, and struggles in retail banking.
It is one of the biggest rounds of layoffs at Goldman since the 2008 Global Financial Crisis.
Goldman, like many other investment banks, has seen its profits take a hit as markets have tumbled since last year because of aggressive interest rate hikes from the Federal Reserve.
The downturn has led to sharp declines in the number of deals and stock listings, as well as trading activity. Goldman has also struggled to gain much traction in consumer banking despite hefty investments.
"Wall Street is still Wall Street, and that means a very intensive environment, making money for their customers and the firm, having high intensity and adjusting on a dime as conditions change," says Mike Mayo, an analyst with Wells Fargo who has covered commercial banks for decades.
Goldman is restructuring its business
Goldman CEO David Solomon has been emphasizing the difficulty of this current economic environment.
Financial firms, like technology firms, had increased their head counts during the pandemic when business was booming, but they are now being forced to announce job cuts and to rethink how they operate. Goldman had just over 49,000 employees at the end of September.
In October, Goldman announced a broad restructuring plan. It combined trading and investment banking into one unit and created a new division that is focused on the company's digital offerings.
Goldman is also turning the page on its attempt to compete against the likes of J.P. Morgan Chase & Co. and Bank of America in retail banking.
For almost a decade, Goldman Sachs has tried to make inroads there, but its consumer-facing brand, Marcus, never caught on.
Marcus has been folded into Goldman's asset and wealth management unit as part of that restructuring, and its head announced plans to leave the firm last week.
A return to the normal practice of cutting staff
It's not just the business downturn that's sparking layoff fears in Wall Street.
Goldman Sachs and other Wall Street firms have traditionally cut low-performing staff each year, a practice they put on pause during the pandemic. Goldman, for example, didn't do these regular layoffs in 2020, 2021, and 2022.
Chris Kotowski, an analyst with Oppenheimer & Co., says everyone working on Wall Street gets accustomed to these kinds of staff reductions, difficult as they are. It's just part of the business of doing business.
"You know, people just don't work out," he says. "Sometimes you expanded into an area that just wasn't fruitful, and sometimes you've just overhired."
And even after this week's layoffs, Goldman Sachs's head count is expected to be larger than it was before the pandemic.
veryGood! (826)
Related
- From family road trips to travel woes: Americans are navigating skyrocketing holiday costs
- Pregnant Sienna Miller Addresses 14-Year Age Gap With Boyfriend Oli Green
- Comedian Leslie Liao talks creative process, growing up in Orange County as child of immigrant parents
- Thai police seize a record haul of 50 million methamphetamine tablets near border with Myanmar
- Why Sean "Diddy" Combs Is Being Given a Laptop in Jail Amid Witness Intimidation Fears
- The U.S. May Not Have Won Over Critics in Dubai, But the Biden Administration Helped Keep the Process Alive
- Fire at a popular open market in Bangkok spews black smoke visible for miles
- Inflation is pinching Hungary’s popular Christmas markets. $23 sausage dog, anyone?
- 'We're reborn!' Gazans express joy at returning home to north
- The U.S. May Not Have Won Over Critics in Dubai, But the Biden Administration Helped Keep the Process Alive
Ranking
- House passes bill to add 66 new federal judgeships, but prospects murky after Biden veto threat
- Off-duty police officer indicted in death of man he allegedly pushed at a shooting scene
- What is Whamageddon? The viral trend that has people avoiding Wham's Last Christmas
- Pregnant Sienna Miller Addresses 14-Year Age Gap With Boyfriend Oli Green
- 'No Good Deed': Who's the killer in the Netflix comedy? And will there be a Season 2?
- How Hilary Duff survives the holidays: 'Lizzie McGuire' star talks parenting stress, more
- Canadian man with criminal record killed at a gym in Mexican resort of Cancun
- Cardinals, Anheuser-Busch agree to marketing extension, including stadium naming rights
Recommendation
Kylie Jenner Shows Off Sweet Notes From Nieces Dream Kardashian & Chicago West
New Hampshire sheriff charged with theft, perjury and falsifying evidence resigns
Washington state college student dies and two others are sickened in apparent carbon monoxide leak
Appeals court denies Trump’s ‘presidential immunity’ argument in defamation lawsuit
Trump invites nearly all federal workers to quit now, get paid through September
What is the Federal Reserve's 2024 meeting schedule? Here is when the Fed will meet again.
The White House is hosting nearly 100 US lawmakers to brainstorm gun violence prevention strategies
What is Whamageddon? The viral trend that has people avoiding Wham's Last Christmas