London Goldman Sachs workers in fear for their jobs: Investment bank set to axe 3,200 staff from tomorrow
Hundreds of Goldman Sachs staff in London could be out of a job as soon as tomorrow as it culls its global workforce.
The investment bank is planning to cut approximately 3,200 jobs – or 6.5 per cent of its 49,000 staff – as it slashes costs in the face of mounting economic gloom.
The cull at the Wall Street giant is due to start tomorrow.
Goldman Sachs is planning to cut approximately 3,200 jobs – or 6.5% of its 49,000 staff – as it slashes costs in the face of mounting economic gloom
This is bad news for the bank’s 6,000 London-based employees and will no doubt dampen the already despondent mood in the City.
Deal-making has dried up on both sides of the Atlantic as sky high inflation, rising interest rates and volatility on financial markets take their toll.
The total value of global mergers and acquisitions declined by nearly 40 per cent in 2022 to around £3.1 trillion, down from a record £4.9 trillion during the pandemic-era deal bonanza in 2021, according to data from markets platform Dealogic.
Reports suggest Goldman’s investment banking arm will be hit particularly hard by the job cuts, as the slump in capital markets activity means lower income from deal fees.
Hundreds of jobs will also be cut in its loss-making consumer business, after the bank scaled back plans for its retail unit Marcus.
Goldman chief executive David Solomon warned staff about impending job cuts in his annual year-end letter in December.
He said the company was facing a variety of challenges, including ‘tightening monetary conditions’ causing an economic slowdown.
Goldman’s workforce has grown by around 34 per cent since Solomon took over in 2018, about twice the pace of its main competitors, as it sought growth during the pandemic.
Mark Freebairn, partner at the executive recruitment firm Odgers Berndtson, said given the anxiety around a global recession ‘it’s not surprising to see them [Goldman] moving aggressively and quickly at this time as the cost reductions probably won’t be felt until the second half of the year.’
However, whilst the cuts reflect continued alarm about the state of the global economy, Freebairn said that 6.5 per cent was lower than initial reports, which had predicted up to 10 per cent of jobs could be axed.
London’s bankers are braced for a gloomy year. Inflation has made life tougher for companies, prompting central banks to hike interest rates.
This makes it harder to use debt to fund takeovers. The knock-on effect on investment banks has been grim. Fees nearly halved in 2022 to £63.4billion, down from £109billion a year earlier, Dealogic data showed.