Londres (Trends Wide) — Goldman Sachs is preparing to lay off up to 3,200 employees this week as the uncertain economic and market climate pushes the bank to look to cut costs, according to a person familiar with the matter.
More than a third of the job cuts are expected to come in the company’s banking and bargaining units, the person said. Like its Wall Street rivals, Goldman Sachs has been hit by a slump in global trading activity as fewer companies merge or seek to raise capital.
Hiring in other areas will continue and the new analyst class will start later this year as planned, the person added. Bloomberg was the first outlet to report on the layoffs.
The bank declined to comment.
Goldman Sachs had 49,100 employees at the end of the third quarter. The company added thousands of positions to its workforce 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 began aggressively raising borrowing costs in an attempt to curb 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.
This has hurt companies like Goldman Sachs, which advise on these transactions. The bank’s revenues during the third quarter of 2022 fell 12% from a year earlier. Investment banking revenues fell 57% year-on-year.
In October, the company announced it would streamline its operations, combining its trading and investment banking divisions and merging its digital consumer bank Marcus with its wealth management business.
Goldman Sachs shares rose less than 1% in pre-market trading on Monday. Last year, they fell about 10%, outperforming the broader S&P 500 index.
The layoffs come at a time when other big companies are bracing 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, have also laid off staff as the business environment worsens.