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Goldman Sachs to cut 3,200 jobs this week

People walk in the Goldman Sachs global headquarters in Manhattan, New York, U.S., November 15, 2021. REUTERS/Andrew Kelly
Goldman Sachs prepares for tough economic conditions, including recessions in many key markets. Photo: Andrew Kelly/Reuters

Goldman Sachs (GS) is planning to cut approximately 3,200 jobs, one of the largest rounds of layoffs in the company's history.

The layoffs are likely to affect most major divisions of the banks but should focus on Goldman Sachs' investment banking division, according to Bloomberg.

The bank is expected to begin informing people that they will lose their jobs on Wednesday.

Goldman Sachs will cut around 6.5% of roles from its workforce of 49,000 as it prepares for tough economic conditions, including recessions in many key markets. Headcount has jumped 34% since the end of 2018.

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The firm is also expected to cut hundreds of jobs from its loss-making consumer operation after scaling back its direct-to-consumer Marcus division.

The investment bank has six offices in the UK, including in London, where it is believed to employ around 6,000 staff, and in Birmingham and Milton Keynes.

However, Goldman Sachs is continuing to hire in areas such as its analyst class for junior employees.

Chief executive, David Solomon, told staff late last month that the cuts were necessary to “weather the headwinds” caused by rising interest rates.

In December, the Financial Times reported that Goldman Sachs was considering cutting its bonus pool for investment bankers by at least 40% this year as it seeks to keep control of costs.

Institutional banks have been struck by a major slowdown in activity in recent months due to volatility in the global financial markets.

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Annual bonuses season is due to kick off this week as JP Morgan (JPM), Citi (C) and Bank of America (BAC) all report their results for the past year.

The drop-off in deal activity is expected to result in a marked fall in bonus payments.

Goldman Sachs is expected to unveil pre-tax losses of more than $2bn (£1.7bn/€187bn) for a new unit covering its credit card and instalment-lending business.

The bank is scheduled to report fourth-quarter earnings on 17 January.

Watch: Goldman to cut about 3,200 jobs