Goldman Sachs to Cut Hundreds of Retail Banking Staff... Focus on High-Net-Worth Client Management

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Goldman Sachs is reportedly laying off hundreds of employees in its retail banking sector to focus on asset management services for high-net-worth individuals and institutional investors, Bloomberg reported on the 12th (local time).

According to the report, Goldman Sachs plans to further reduce hundreds of employees in the retail banking sector following the large-scale restructuring initiated last September. Although the exact number of layoffs has not been disclosed, Bloomberg stated that at least 400 jobs are expected to be cut.

Additionally, Goldman Sachs is expected to halt new personal loans through its internet personal loan platform 'Marcus,' launched in 2016. Bloomberg explained that Goldman Sachs is effectively withdrawing from the personal retail banking business and focusing on expanding high-yield savings deposits for wealthy clients.

Goldman Sachs appears to have made this decision to offset losses incurred in its investment banking (IB) division. In the third quarter of this year, Goldman Sachs' net profit was $2.96 billion (3.8648 trillion KRW), a 44% decrease compared to the same period last year. The IB division's net profit dropped by 57% year-over-year, which was a significant factor.

The retail banking sector also reportedly failed to generate substantial profits. Previously, Goldman Sachs entered the retail banking business in 2016 to diversify its revenue structure, which had been heavily reliant on IB, but faced profitability challenges due to increased operating costs and a slowdown in consumer transactions amid an economic downturn.

On the other hand, the asset management division saw an 18% increase in net profit. Goldman Sachs plans to reorganize its business focusing on asset management services targeted at high-net-worth individuals. The existing organization, which was divided into four sectors?retail banking, asset management, IB, and platform solutions?will be consolidated into three. The retail banking business targeting general consumers will be reorganized under the 'Platform Solutions' division, which now includes the fintech company GreenSky, acquired last October.

Major foreign media outlets forecast, "Goldman Sachs appears to be making extensive preparations for a recession next year," but added, "It may take some time to realize profits through cost reductions."

This content was produced with the assistance of AI translation services.