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Goldman Sachs Intends To Layoff Several Hundred Employees This Month

A recent article from The New York Times claims that Goldman Sachs is preparing for a round of layoffs that may begin as early as next week.

According to people with knowledge of the situation, several hundred positions will be cut by the Wall Street giant starting this month.

The cutbacks reflect a return to Goldman’s annual culling cycle, which it had largely suspended during the pandemic, although the overall number is lower than some earlier rounds.

The move by the industry leader in banking is the most unambiguous indication that has descended upon the sector due to a decline in income following years of record-breaking growth.

According to information from Bloomberg, analysts anticipate the bank’s earnings will decline by more than 40% this year. The New York-based company announced in July that it would restrict hiring and reintroduce yearly performance assessments, indicating job cuts it intended to make later in the year.

In its attempt to control spending, it described the situation as a “challenging operating environment.”

The performance assessments eliminate the staff members who perform the worst. Denis Coleman, Goldman’s chief financial officer at the time, suggested that the company may slow down the pace at which it replaces employees it loses to attrition. After the end of the second quarter, Goldman had only 47,000 employees.

Earlier on Monday, The New York Times reported that Goldman was planning for job layoffs. A representative at Goldman refused to comment.

Similar to its competitors on Wall Street, Goldman has been affected by the abrupt halt in investment banking. The volatility that has fuelled trading gains has also weighed on capital markets and asset management.

Despite a 32% increase in revenue for the company’s trading division in the second quarter, investment banking revenue decreased 41% due to a significant decline in underwriting.

The company reported increases in expenditures from expansion initiatives. Still, overall operating expenses decreased in the second quarter compared to the same period a year earlier as Goldman lowered compensation and benefits.

The price of Goldman Sachs shares has decreased by about 10% this year and around 15% from one year ago. Comparatively, the S&P 500 Financials index fell 7.5% over the previous 12 months.

Source: Bloomberg

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