Goldman plans workforce deduction, to lay off employees in annual performance review

NEW DELHI: Goldman Sachs plans to reduce its workforce, cutting several hundred as part of the company’s yearly evaluation process, which focuses on identifying and addressing underperforming employees.
The financial institution had temporarily suspended performance-based layoffs for a period of two years in response to the COVID-19 pandemic. However, the practice was reintroduced in 2022 as the firm resumed its standard assessment procedures.
“Our annual talent reviews are normal, standard and customary, but otherwise unremarkable.We expect to have more people working at Goldman Sachs in 2024 than 2023, a Goldman spokesperson told Reuters.
Goldman’s shares turned positive in afternoon trading and closed with a 0.6 per cent gain. The stock has experienced a remarkable 32 per cent surge this year, outperforming both the broader markets and an index tracking rival large-cap banks.
In the previous year, the exercise led to the termination of 1 per cent to 5 per cent of Goldman’s workforce. The extent of the cuts under Goldman’s strategic resource assessment has varied over time, depending on market conditions and the bank’s financial outlook.
As of June 30, Goldman’s global workforce consisted of 44,300 employees. The bank implemented several rounds of workforce reductions in 2023 due to a slowdown in dealmaking and higher-for-longer interest rates weighed on the macroeconomic outlook, Reuters reported.
However, the operating environment for banks has recently improved, with Goldman reporting a more than twofold increase in its second-quarter profit in July, driven by strong performance in debt underwriting and fixed-income trading.
The resilience of the US economy has instilled confidence in corporate executives to pursue deals, debt sales, and stock offerings. Nevertheless, dealmaking activity remains below historical averages, despite the industry-wide recovery.
Earlier, a Wall Street Journal report said that the layoffs, which have already begun, will continue through the fall and could affect more than 1300 employees, representing 3 per cent to 4 per cent of Goldman’s workforce. However, Goldman said in its statement that the numbers reported by the Journal were inaccurate.