Goldman Sachs begins laying off thousands of employees

• Insider has learned that Goldman Sachs has begun its planned layoffs of thousands more employees.
• Last month, the company sent signals that the cuts were coming amid a decrease in dealmaking.
•  The move precedes the industry’s spring bonus season. 

Goldman Sachs is following suit its reported planDealmaking slows down from 2021, when the industry was staffed up to meet demand. 

Insider learned that Goldman Sachs started conversations Wednesday with employees who were affected by the layoffs. According to a source, the planned cuts will not affect more than 3,200 employees of the bank’s 49,500 workforce. This is equivalent to 6.5% of Goldman Sachs global headcount.

Insider reached out to Goldman Sachs for comment but they declined to comment on the layoffs.

Goldman Sachs, among other things, had previously laid off employees from its media and tech departments. Insider reportedSeptember Goldman’s consumer banking division also in September faced mounting losses in 2022. 

Wall Street layoffs tend not to occur before the earnings and spring bonus seasons, which means that employees are often cut loose before large amounts of money are distributed. The bank is expected release its Q4 2022 earnings on January 17. 

Wall Street cuts during downturns can affect highly-paid executive level employees as well support staff like those doing research and administrative work. Jeanne Branthover is a managing partner at DHR Global and specializes in placing bankers at financial service firms.

She said that many of these firms had hired support teams to assist business developers and dealmakers. But, things are changing quickly. Indeed, dealmaking slowed sharplyIn 2022.

Goldman’s cuts follow recent layoffs in the tech industry that saw engineers at Meta, Twitter and other companies lose jobs. 

A recent survey by the accounting firm PricewaterhouseCoopers highlighted how intent executives have been on cost-cutting to weather rising interest rates and the decline of dealmaking from highs in 2021. 

The PwC surveyMore than 80% of the more that 650 executives who took part in the survey said that they expected a recession and were planning to reduce their workforce. According to the survey report, this could create a circular effect in which companies do similar things on a large scale and manifest the expected downturn. 

According to the report, companies that prepare for an economic downturn by staying put in their homes will save cash and reduce spending. This approach can lead to the exact situation that they were trying to avoid.