(Bloomberg) — Goldman Sachs Group Inc. is working on a fresh round of job cuts that will be unveiled in a matter of weeks, Chief Executive Officer David Solomon said in his traditional year-end message to staff.
The firm may seek to eliminate as much as 8% of its workforce, or up to 4,000 jobs, to contain a slump in profit and revenue, people with knowledge of the matter said earlier this month, although the final number could come in lower. Top managers have been asked to identify potential cost-reduction targets, and no final job-cut number has been determined, the people said, asking not to be identified discussing internal deliberations.
A spokesperson for the New York-based company declined to comment.
“We need to proceed with caution and manage our resources wisely,” Solomon said in his message.
With investment-banking revenue plummeting and a recession looming, Wall Street is in retrenchment mode. The job cuts and hiring freezes that struck the tech world have made their way to the finance industry, with banking executives preparing for what’s expected to be an austere year ahead.
Morgan Stanley, Credit Suisse Group AG and Barclays Plc have all either already fired staff or announced that they plan to do so in coming months, and some smaller firms have even completed multiple rounds of terminations.
Goldman is on track to post about $48 billion in annual revenue, its second-best performance, behind only last year’s record. An expensive foray into consumer banking followed by a subsequent retreat, along with spending on technology and integrating operations, have contributed to the cost bleed this year.
The proposed cuts would mark a sharper pullback than plans disclosed by any of Goldman’s rivals as management struggles to achieve profitability targets. Analysts predict the Wall Street giant’s adjusted annual profit could fall 44%.
Goldman executives have pointed out that the bank’s workforce has ballooned 34% since the end of 2018 to more than 49,000 as of this year’s third quarter.