Goldman says more job cuts coming in ‘tougher environment’
GOLDMAN Sachs Group outlined plans for more job cuts as the bank hunkers down in the face of what President John Waldron called an extraordinarily challenging economic backdrop.
“We are now embarking on additional targeted action with our headcount,” Waldron said on Thursday (Jun 1) at a conference hosted by AllianceBernstein Holding. “We are preparing for a tougher environment.”
Goldman is observing “a pretty risk-off tone” from its clients, Waldron said, with corporate chief executive officers also pretty cautious. “Feels like we are going to have a contractionary environment for a period of time.”
The investment bank is working on what would be its third round of job cuts in under a year, Bloomberg News reported earlier this week. The New York-based firm eliminated hundreds of jobs in September, followed by about 3,200 cuts at the start of this year. The moves this time are expected to affect less than 250 people and will include more-senior employees at the firm, one of the people with knowledge of the plans said, asking not to be named discussing private matters.
In February, Goldman Sachs outlined plans for about US$1 billion in expense reductions. Waldron said the bank is on target to achieve that goal.
On Wednesday, Morgan Stanley Co-President Andy Saperstein gave a gloomy forecast for the bank’s sales and trading and dealmaking operations. “Sales and trading is softer this quarter,” he said. “Results will be notably down year-over-year.”
Saperstein also said investment banking is “very challenged. As an industry we have been in a sustained trough since last year.”
Analysts have forecast Goldman Sachs revenue this year will be roughly in line with what it posted last year, at about US$48 billion. That’s still more than US$10 billion less than what the firm notched in 2021 during a frenzied period of dealmaking and heightened trading activity. BLOOMBERG
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