Goldman Sachs plans to cut under 250 jobs in coming weeks-source
3:30 pm Tuesday, May 30th, 2023
(Reuters) – Goldman Sachs Group Inc is expected to cut fewer than 250 jobs in the coming weeks as a sluggish market for deals weighs on investment banking, a source familiar with the matter said.
The departures could be spread across seniority levels and include partners and managing directors, the source said. The layoffs were reported earlier by the Wall Street Journal. Goldman had 45,400 employees at the end of March.
The move comes after Goldman reduced its headcount by about 3,200 in the first quarter in its biggest round of layoffs since the 2008 financial crisis. It also cut about 500 jobs last year.
A second source said the bank has kept budgets tight this year.
Investment banks have been hit hard by a slump in dealmaking as the Federal Reserve raised interest rates aggressively to tame inflation and the war in Ukraine clouded the economic outlook.
Rival Morgan Stanley planned to eliminate about 3,000 jobs in the second quarter, in its second round of layoffs in six months, a source told Reuters earlier in May. Lazard Ltd will also reduce its workforce by 10%.
Goldman Sachs Chief Financial Officer Denis Coleman told investors in late February that the bank planned to improve its efficiency ratio by reducing headcount, not replacing staff who depart and trimming other expenses.
The plan included $600 million in payroll reduction.
Goldman set a medium-term target for its efficiency ratio of 60% versus 68.7% at end of March. Banks prefer a lower efficiency ratio as an indicator of better profitability.
Global mergers and acquisitions slumped to their lowest levels in more than a decade in the first quarter of 2023, while volumes for initial public offerings also fell to the lowest level since 2019.
(Reporting by Saeed Azhar and Niket Nishant in Bengaluru; Editing by Arun Koyyur, Lananh Nguyen and Cynthia Osterman)
