Financial crisis redux? Goldman Sachs likely to start cutting hundreds of jobs this month. Here's why

Wall Street titan Goldman Sachs is looking to cut hundreds of jobs, as per a source familiar with the plans. This will be the first time in the last two years that Goldman Sachs Group Inc. will be cutting hundreds of jobs. The Wall Street titan cuts its 1 per cent to 5 per cent workforce yearly, but the group had paused this annual practice during the coronavirus pandemic.

The source told news agency Reuters that the staff reduction by Goldman Sachs in 2022 may be in the lower portion of its usual range. The source also said that the job cutting in the company might start as early as the next week. Notably, the workforce of Goldman Sachs reached 47,000 by June end, an increment of 15% from the last year's figure. Hence, a 1 per cent reduction in staffing would mean laying off around 500 employees.




The New York Times had already reported that the Wall Street giant was considering laying off some of its staff. However, Goldman Sachs declined to comment on the report. In the month of July, Goldman Sachs stated that it might reduce the number of hiring and cut expenses because of the worsening of the economic outlook. Besides, the Chief Financial Officer at Goldman Sachs, Denis Coleman, had stated that the bank would also reinstate the process of performance review for its employees by the end of 2022. The process was paused during the pandemic. The investment bank had reported a plunge of 48 per cent in its quarterly profit, beating forecasts due to gains in commodities trading and fixed income.



Meanwhile, Carson Group's Chief Market Strategist Ryan Detrick has said that the pressure on banks is most likely to continue, and the financial institutions may cut costs wherever and whenever possible. A decline in hiring and job cuttings by the banks are quite possible, Ryan added.

FAQs:

1). What is Goldman Sachs?
Goldman Sachs is a leading global investment banking institution.

2). How much loss did Goldman Sachs suffer in its quarterly profit in July?
Goldman Sachs reported a plunge of 48 per cent in its quarterly profit in July.