Goldman Sachs warns of more job cuts amid economic woes

Bloomberg News reports that Goldman Sachs, anticipating more troubles with the U.S. economy, is getting ready to cut more jobs. 

Per Bloomberg:

Goldman Sachs Group Inc. is working on a fresh round of job cuts that will be unveiled in a matter of weeks, Chief Executive Officer David Solomon said in his traditional year-end message to staff.

“A careful review” is in progress

Bloomberg appears to have gotten access to at least a portion of that “traditional year-end message” that Solomon recently sent to Goldman Sachs employees.

According to Bloomberg, Solomon, in the message, writes, “we are conducting a careful review and while discussions are still ongoing, we anticipate our headcount reduction will take place in the first half of January.”

Solomon goes on to explain why.

“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” Solomon writes. “For our leadership team, the focus is on preparing the firm to weather these headwinds.”

4,000

Bloomberg reports that as many as 4,000 jobs may be on the chopping block.

“The firm may seek to eliminate as much as 8% of its workforce, or up to 4,000 jobs, to contain a slump in profit and revenue, people with knowledge of the matter said earlier this month, although the final number could come in lower,” according to Bloomberg.

The outlet further reveals that “top managers [at Goldman Sachs] have been asked to identify potential cost-reduction targets, and no final job-cut number has been determined, the people said, asking not to be identified discussing internal deliberations.”

Background

None of this comes as that much of a surprise. In fact, Goldman Sachs and countless others have been anticipating this for some time now.

It was back in September 2021 that reports were published citing Goldman Sachs economists as predicting that tough economic times were ahead. Goldman Sachs accordingly began downgrading its expected growth estimates.

It, of course, is not just Goldman Sachs, though. Wall Street, in general, is in retreat as everyone is anticipating a recession. Just like Goldman Sachs, other groups are either preparing for layoffs or have already begun layoffs.

Bloomberg, in its report, focuses on Goldman Sachs because Goldman Sach’s cuts, according to the outlet, are “sharper” than the cuts that are expected from its rivals.

What this all suggests is that the U.S. economy, with President Joe Biden at the helm, has still not reached its lowest point. As Biden himself has said multiple times recently, “we’re just getting started.”