The CEO of Goldman Sachs Group Inc. expects to cut jobs in early January, according to a report late Wednesday.
In his annual year-end letter to staff, Goldman
Chief Executive David 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,” according to Bloomberg News.
Solomon said the company faces a variety of challenges, including “tightening monetary conditions” that are causing an economic slowdown, Bloomberg reported, and “the focus is on preparing the firm to weather these headwinds.”
Earlier this month, there were reports that the investment-banking giant was planning to lay off about 8% of its workforce, or nearly 4,000 employees. Bloomberg reported Wednesday that the number of upcoming layoffs has not been settled, and it may be fewer than that figure.
Goldman reintroduced performance reviews in 2022, after suspending them during the pandemic. In pre-pandemic times, about 2% to 5% of its lowest-performing employees would be laid off every year.
Goldman employed about 49,000 people as of the end of its third quarter, and executives have noted its workforce has grown by 34% since Solomon took over as CEO in 2018, about twice the pace of its main competitors.
Last week, the New York Post reported about internal grumblings at Goldman toward Solomon from middle- and upper-management, leading to speculation that his job could also be at risk.
In October, Goldman reported its third-quarter net income fell about 44% from the previous year and revenue dropped to $11.98 billion from $13.61 billion a year ago. Still, Goldman is on track to post its second-best annual revenue ever, about $48 billion. The bank also said it would slow the pace of its hiring and reorganize into three business units: Asset & Wealth Management, Global Banking & Markets and Platform Solutions.
Goldman shares have rallied more than 13% over the past three months, but are still down about 11% year to date, compared to the S&P 500’s
2% gain and 21% decline over those periods, respectively.