Written by Manya Saini
(Reuters) – Goldman Sachs plans to cut several hundred jobs as part of an annual review process targeting underperforming companies, a person familiar with the matter told Reuters on Friday.
The investment bank has reintroduced performance-related job cuts in 2022 after a two-year pause due to the Covid-19 pandemic.
“Our annual talent reviews are normal, standard and customary, but otherwise unremarkable,” a Goldman Sachs spokesperson said in a statement to Reuters. “We expect to have more people working at Goldman Sachs in 2024 than we did in 2023.”
Last year, the exercise reportedly led to 1% to 5% of Goldman Sachs’s staff losing their jobs. Over the years, the cuts made under Goldman’s strategic resource assessment have fluctuated based on market conditions and its financial outlook.
The bank had 44,300 employees globally as of the quarter ended June 30. The bank has undertaken multiple rounds of workforce cuts in 2023 as dealmaking has suffered and higher interest rates for a longer period have weighed on the overall economic outlook.
The operating environment for banks has improved since then, with Goldman Sachs reporting second-quarter earnings that more than doubled in July thanks to strong debt underwriting and fixed-income trading.
The resilience of the U.S. economy has given corporate executives the confidence to pursue deals, debt sales and equity offerings. But despite the broad-based recovery across the industry, dealmaking activity has remained below historical averages.
Shares of Goldman Sachs turned positive in afternoon trading and closed up 0.6%. The stock has gained 32% this year and has outperformed the broader markets as well as an index that tracks major rival banks.
Earlier today, The Wall Street Journal reported that the layoffs, which have already begun, will continue through the fall and could affect more than 1,300 employees, or 3% to 4% of its workforce.
But Goldman Sachs said in a statement to Reuters that the figures reported by the newspaper were inaccurate.