Layoff Wave Hits Wall Street... Goldman Sachs to Announce Hundreds of Job Cuts Soon

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Following big tech, Wall Street's major investment bank Goldman Sachs is also set to carry out layoffs involving hundreds of employees.

Local media outlets such as The New York Times (NYT) and The Wall Street Journal (WSJ) reported on the 13th (local time), citing sources, that Goldman Sachs plans to announce layoffs involving hundreds of employees as early as next week.

Goldman Sachs resumed its annual performance review, which had been suspended during the COVID-19 pandemic, earlier this year. The upcoming layoffs are expected to be based on this review. Typically, Goldman Sachs has laid off 1-5% of its employees through the annual performance review.

As of the end of June, Goldman Sachs had 47,000 employees, an increase of 6,000 compared to the same period last year. The firm significantly increased staff mainly in the mergers and acquisitions (M&A) and initial public offering (IPO) sectors, which recorded record highs last year. However, with the stock market downturn this year causing the M&A and IPO markets to freeze, it is analyzed that the company is moving toward large-scale layoffs. According to Dealogic, U.S. IPOs and M&As have dropped by 40% year-over-year through the end of July this year.

Earlier, Goldman Sachs CEO David Solomon, while disclosing sharply decreased second-quarter earnings, stated, "The Federal Reserve's tightening is worsening economic conditions," and announced plans to reduce new hiring.

On Wall Street, there are growing expectations that a wave of layoffs will begin with Goldman Sachs. In particular, attention is focused on the resumption of layoffs on Wall Street, which had been halted since the pandemic. Bloomberg News described this as "the clearest sign that the financial industry's atmosphere, which showed record performance in recent years, is freezing over."

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