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Goldman Sachs CEO says job cuts will come in January

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Goldman Sachs (GS) is preparing to cut its workforce in the coming weeks, CEO David Solomon told staff in a year-end audio message.

The head of Wall Street’s top investment bank told employees he was conducting a staffing review at the company and holding discussions about layoffs likely to take place in the first half of January, Bloomberg reported on Wednesday.

Goldman Sachs declined to comment.

“There are a variety of factors affecting the business landscape, including tightening monetary conditions that are slowing economic activity,” Solomon said. “For our leadership team, the focus is on preparing the company to face these headwinds.”

Bloomberg also reported that top managers were asked to identify possible cost-cutting targets and that a final count of job cuts has not been determined.

Earlier this month, Semafor reported that Goldman planned to cut up to 8% of its workforce, or about 4,000 jobs.

David Solomon, President and CEO of Goldman Sachs, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California.  (Photo by Patrick T. FALLON / AFP) (Photo by PATRICK T. FALLON / AFP via Getty Images)

David Solomon, President and CEO of Goldman Sachs, speaks during the Milken Institute Global Conference on May 2, 2022 in Beverly Hills, California. (Photo by Patrick T. FALLON / AFP) (Photo by PATRICK T. FALLON / AFP via Getty Images)

The bank employed 49,100 people at the end of the third quarter, according to a regulatory filing, up from 43,000 in the same period last year, following a surge in hiring throughout 2021 as business activity surged after the peak of the pandemic.

The layoff discussions come after a substantial slowdown in bank earnings this year, with market volatility reducing investment bankers’ income – and many companies slashing their workforce to cut costs in anticipation of a possible recession.

At the Wall Street Journal’s CEO Council Summit earlier this month, Solomon acknowledged the banking industry’s aggressive hiring in the past year and 2020 to keep up with record transaction activity during the period.

“It’s a natural phenomenon that you have to trim in some areas and back off, so we’re going through the process of thinking about how we’re going to do that,” Solomon said. “But for sure, we will have to reduce our footprint a little bit.”

On an earnings call earlier this year, Goldman Sachs said it would reinstate annual performance reviews disrupted during the pandemic, a strategy that has historically served to weed out laggard bankers — as well as slow hiring. A reduction of up to 8% would go beyond your typical low-performing annual cull.

Colleagues in the financial sector also discussed or handed in resignations. Morgan Stanley (MS) cut about 2% of its workforce this month, while Citigroup (C) also laid off some workers, although the latter noted that this was just part of the usual annual cull.

JPMorgan (JPM) and Bank of America (BAC) have taken a more cautious approach to potential job cuts.

“You have to be very careful when you have a bit of a recession to start cutting bankers here and there, because you’re going to hurt the possibility of growth going forward,” said JPMorgan President and COO Daniel Pinto during an investor conference in September. .

Bank of America CEO Brian Moynihan told a conference earlier this month that his institution will not lay off people, but rather let natural attrition occur and let open positions go unfilled, or fill them internally.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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