‘Goldman Sachs,’ the storied investment bank, plans to cut up to 8% of its employees to prepare for a more challenging environment next year, according to someone familiar with the matter. The layoffs will affect every division of the bank and are likely to occur in January, according to the person who declined to be identified. That is ahead of an upcoming conference for Goldman shareholders at which management is expected to present performance targets. The New York-based investment bank typically pays bonuses in January, and it’s possible the layoffs could be a way to preserve bonus dollars for remaining employees.
This year, Wall Street is adjusting to lower revenue after a two-year boom in deals and hiring sputtered out. Goldman Sachs was the first major firm to cut jobs in September, though only a few hundred employees were affected. Citigroup and Barclays also cut modest numbers of employees, while Morgan Stanley cut about 1600 employees last week, CNBC reported. Goldman had been in hiring mode previously: the firm had 49,100 workers as of Sept. 30, which is 14% more than a year earlier. Goldman CEO David Solomon indicated that he was looking to rein in expenses at a conference for financial firms last week. “We continue to see headwinds on our expense lines, particularly in the near term,” Solomon said. “We’ve set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set.”