A massive job cut began at Goldman Sachs on Thursday with the investment giant planning to slash down around 6.5% of its workforce. CNBC reported that around 3,200 people in the workforce are likely to be let go, terming it the cost-cutting move the largest in the banking sector.
"We're looking at expenses in every corner of the firm, so it's ridiculous to focus on any single segment or item," BBC quoted Goldman Sachs's spokesperson as saying. The firm employs around 49,000 people across the world.
Among several people to be laid off is 23-year-old Shubham Sahu, a graduate from IIT-Kharagpur. He worked at the Goldman Sachs Bengaluru office. "At the beginning of 2023, I was also impacted by the layoffs at Goldman Sachs just after my 23rd birthday. Wow, this is truly a different way to start a year," he wrote on LinkedIn.
Here is all you need to know about the job cuts at Goldman:
Why is Goldman slashing jobs?
The recent job cuts at Goldman are the biggest since the 2008 recession, Reuters reported. There had been a hiring surge at Goldman over the past few years, boosting its workforce by nearly 10,000 people since the end of 2019, BBC said in a report.
In December 2022, several media reports, including BBC and Reuters, said that job cuts at Goldman were on cards owing to the slowing down of the business. BBC estimated the numbers to be as high as 8%. Profits had been falling sharply for the company and revenues dropped 20% in 2022, the report said. "We've set in motion certain expense mitigation plans, but it will take some time to realise the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set," Goldman chief executive David Solomon said last year.
Reuters reported that investment banking will be facing the "deepest cuts".
"We're grateful for all our people's contributions, and we're providing support to ease their transitions. Our focus now is to appropriately size the firm for the opportunities ahead of us in a challenging macroeconomic environment," the report quoted the Goldman statement.
Amid apprehensions of an economic recession, several banks are likely to cut down on the workforce. Morgan Stanley has laid off 1,600 people, while HSBC is letting go 200 employees, Reuters reported.