Business

Goldman Sachs set to fire more than 1,300 employees, WSJ reports

By
James Franey
Published Aug. 30, 2024, 4:55 p.m. ET

David Solomon is sharpening the axe again.

The Goldman Sachs CEO will slash more than 1,300 jobs as part of the bank’s ongoing review to cull poor performers, the Wall Street Journal reported on Friday

Goldman’s cuts will affect between 3% and 4% of Goldman’s 45,000-strong workforce, the Journal added, citing people familiar with the matter.

The cuts are part of the bank's annual performance reviews that cull those believed to have performed poorly.
The cuts are part of the bank’s annual performance reviews that cull those believed to have performed poorly. Getty Images

The layoffs have already started and will continue through the fall, according to the Journal, under the bank’s annual review process known as “strategic resource assessment.”

“Our annual talent reviews are normal, standard, and customary, but otherwise unremarkable,” Tony Fratto, a Goldman spokesman, told the newspaper.

He added that headcount would be higher at the end of 2024, compared to the end of last year.

The bank regularly seeks to cut back on between 2% and 7% of its workforce each year based on various performance factors, market conditions and its financial outlook.

Last year, the exercise reportedly resulted in cuts between 1% and 5% of employees losing their jobs.

Goldman reinstated performance-related job culls in 2022 after it was halted for two years owing to the COVID-19 pandemic.

In the midst of the pandemic, Goldman Sachs and other major banks allowed for flexible working-from-home.

But firms are now starting to haul staff back to work and crack down on those who fail to show up regularly in person.

Goldman CEO David Solomon has been critical of the post-COVID working-from-home culture, calling it an "aberration."
Goldman CEO David Solomon has been critical of the post-COVID working-from-home culture, calling it an “aberration.” Getty Images

Solomon, speaking in 2021, once called teleworking “an aberration that we are going to correct as soon as possible.”

One factor for annual performance reviews at top banks is in-office attendance.

The layoffs come after Goldman let go some 3,200 people in January 2023 amid a slump in deal-making with bonuses being trimmed as well as.

But there is hope that there might be a strong rebound before the end of this year, despite fears of a possible economic downturn and instability over the forthcoming US election.

Goldman Sachs reported a 21% increase in investment banking revenue for the second quarter of this year compared with the same period 12 months previously.

“From what we’re seeing, we are in the early innings of a capital markets and M&A recovery,” Solomon said on an earnings call last month.

Goldman shares turned positive in afternoon trading and closed up 0.6%. The stock has surged nearly 32% this year and has outperformed broader markets.