Goldman preparing to cut 3,200 jobs to rein in costs

Goldman Sachs will begin cutting up to 3,200 jobs within days, according to a person familiar with the matter, as the Wall Street bank tries to rein in costs in the face of a slowdown in investment banking and a paring back of its consumer bank.

The cuts, which represent around 6.5 per cent of its roughly 49,000 workforce, are below the worst-case scenario of 3,900 jobs Goldman chief executive David Solomon and his management team had discussed late last year. The final number could also still be smaller than 3,200, the person familiar with the matter said.

However, the scale of cuts being prepared are some of the deepest Goldman has made in its recent history and are more drastic than what many of the bank’s peers currently have planned.

It reflects in part how Goldman grew its headcount at twice the pace of the broader banking industry since the start of 2020 as it expanded into new areas while also pausing an annual cull of bottom-performing employees during the pandemic.

Cuts will be made across the bank, hitting Goldman’s consumer business, which the company is scaling back, as well as its money-spinning investment banking and trading operations. Goldman is continuing to hire in areas such as its analyst class for junior employees.

Goldman declined to comment on the cuts, which were first reported by Bloomberg.

The bank is scheduled to report fourth-quarter earnings on January 17. Analysts are forecasting earnings per share to have fallen around 8 per cent year on year during the final three months of 2022.