US bank Goldman Sachs set to fire over 3000 staff with biggest lay-offs since GFC

Home Economy US bank Goldman Sachs set to fire over 3000 staff with biggest lay-offs since GFC
US bank Goldman Sachs set to fire over 3000 staff with biggest lay-offs since GFC

A major US bank is set to sack 3200 staff in the coming weeks in one of its biggest round of job cuts in its more than 150-year history.

The lay-offs at Goldman Sachs will be the largest since the Global Financial Crisis (GFC) in 2008 and Bloomberg reported a third of the cuts would come from its core trading and banking units.

A new unit that includes the bank’s credit card and instalment lending business is also set to drop the bombshell that it has recorded more than $US2 billion ($A2.9 billion) in pre-tax losses, according to Bloomberg sources.

Goldman Sachs has seen its employee numbers swell by 34 per cent since the end of 2018, climbing to more than 49,000 as of September last year as it boosted its staff count during the pandemic.

However, the bank has been hit by the uncertain outlook in the global economy and fears of a US recession with a major slowdown in corporate deal-making activity as well as its expensive move into consumer banking.

The sackings are also said to be influenced by the bank’s decision to pause its annual cut of underperformers during the pandemic, which generally saw around 1-5 per cent of staff shed each year.

Goldman Sachs is well known for routinely culling its staff before bonuses have to be paid out at the end of the year, but the company paused this practice over the past two years.

Now, analysts have estimated the bank is facing a 46 per cent drop in profits from about $US48 billion ($A69 billion) of revenue.

“There are a variety of factors [affecting] the business landscape, including tightening monetary conditions that are slowing down economic activity,” chief executive David Solomon said last month.

“For our leadership team, the focus is on preparing the firm to weather these headwinds.”

The job cuts have been flagged ahead of bank’s annual bonus payments which are usually delivered later in January and are expected to fall by about 40 per cent.

Rumblings about mass sackings at Goldman Sachs have been happening since September last year as the economic downturn took its toll.

A number of other corporate giants have also embarked on aggressive cost-cutting measures, with global tech giant Amazon set to of lay off more than 18,000 of its workers, representing about 6 per cent of the retailer’s overall corporate workforce of 300,000 people.

US software company Salesforce also plans to cut 10 per cent of staff, or more than 7000 employees, citing a challenging macro environment.

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