Goldman Sachs plans new job cull for bankers deemed underperformers

Goldman Sachs plans new job cull for bankers deemed underperformers



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Goldman Sachs is preparing to impose another round of job cuts for employees deemed to be bottom performers, which could come as early as next month, said people familiar with the matter.

The planned move is part of an annual exercise that typically results in between 1 per cent and 5 per cent of company-wide employees losing their jobs. Goldman is targeting a number at the lower end of that range at parts of its core investment banking and trading businesses and aims to begin the process as early as late October, the people said.

One per cent of Goldman’s total headcount, which also includes asset and wealth management as well as operational roles, would equal about 440 jobs.

The so-called strategic resource allocation was paused during the coronavirus pandemic until last year, when job losses were also at the lower end of the historical range.

Managers across Goldman have drawn up lists of employees who could be dismissed, the people said. Final numbers are still being decided and could be affected by any employees who quit before the lay-offs are communicated to staff, which would result in fewer jobs being cut, the people added.

Goldman declined to comment.

Goldman has eliminated thousands of jobs this year. In January it cut roughly 3,200 jobs, or 6.5 per cent of its workforce, in an effort to reduce costs following a dramatic slowdown in investment banking activity and losses at its consumer banking business. A number of senior executives have also quit the bank.

Pay at the bank was sharply lower for 2022, and the combination of dismissals and modest bonuses has hit morale. Chief executive David Solomon has also faced a barrage of media coverage criticising his leadership.

In an interview with CNBC on Thursday, Solomon said the “caricature that’s been painted (of me) is not one that I recognise”.

“I understand why it’s interesting to the media, but it’s not what the people at Goldman Sachs are focused on,” Solomon said.

He admitted that 2022 being the “first time in over a decade that we had a meaningful down move in compensation” had contributed to discontent at the bank.

Goldman’s net profit fell 35 per cent for the first six months of 2023 and employees have been braced for another disappointing year for pay.

Senior Goldman executives have had conversations with employees guiding them that the bank may be willing to pay employees a higher share of profits this year, said people familiar with the matter. Goldman has yet to draw up detailed remuneration plans and will only start that process towards the end of the year.

Goldman is working to pare back its ambitions in consumer banking after years of losses and is emphasising growth plans in steadier businesses such as asset and wealth management. But analysts view those activities as being far from rivalling investment banking and trading in profits and revenues at the bank.


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