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Goldman Sachs has started laying off over 3,000 employees globally

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David M. Solomon, Chairman and CEO, Goldman Sachs, participates in a panel discussion during the annual Milken Institute Global Conference at The Beverly Hilton Hotel on April 29, 2019 in Beverly Hills, California.Goldman Sachs CEO David Solomon has warned the bank would need to be cautious ahead of a potential economic slowdown.

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  • Goldman Sachs has started its anticipated layoffs of thousands of employees, a source told Insider.
  • The company sent signals last month that the cuts were coming amid a decline in dealmaking.
  •  The move precedes the industry’s spring bonus season. 

Goldman Sachs is following through on its reported plan to lay off thousands of employees as dealmaking slowed from 2021 when the industry staffed up to meet the demand. 

On Wednesday, Goldman Sachs began conversations with employees affected by layoffs, a source with knowledge of the situation told Insider. All told, the planned cuts will affect no more than 3,200 employees out of the bank’s roughly 49,500 workforce, the source said. This works out to a maximum of about 6.5% of Goldman’s global headcount.

Goldman Sachs declined to comment on the layoffs when contacted by Insider.

Goldman Sachs had previously laid off employees in its media and tech teams, among others, Insider reported in September. Goldman’s consumer banking unit also faced mounting losses in 2022

Wall Street layoffs tend to be timed to precede the earnings and spring bonus season, cutting employees loose before large sums are handed out. The bank is expected to release its earnings for Q4 2022 on January 17. 

Wall Street cuts during downturns tend to affect highly-paid executive-level employees as well as support staff like those doing research, administrative and tech work, said Jeanne Branthover, a managing partner at recruiting firm DHR Global, who specializes in placing bankers and senior-level executives at financial services firms.

“A lot of these firms hired support teams for business developers and dealmakers, but things are changing rapidly,” she said. Indeed, dealmaking slowed sharply in 2022.

The cuts at Goldman follow tech industry layoffs that have seen engineers at Meta, Twitter, and other companies lose their jobs in recent months. 

A recent survey by the accounting firm PricewaterhouseCoopers highlighted how intent executives have been on cost-cutting to weather rising interest rates and the decline of dealmaking from highs in 2021. 

In the PwC survey in November, more than 80% of the more than 650 executives who participated said they anticipated a recession and planned to reduce their workforces. The survey report stated that there could be a circular effect to this approach when companies act similarly on a large scale, manifesting the anticipated downturn. 

“When companies hunker down in anticipation of an economic downturn, they conserve cash and scale back spending,” the report said. “When entire industries take this approach, they can create the very situation they were hoping to avoid.”

Read the original article on Business Insider

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