Investment bank and financial services company Goldman Sachs’ Chief Executive Officer David Solomon wrote to employees in his year-ender letter announcing that the company would conduct a fresh round of layoffs in January.
The CEO of the investment bank wrote in his letter, “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.”
In the letter, which has been accessed by Business Today, Solomon highlighted that tightening monetary conditions and the slowdown in economic activity are the reasons behind the layoff round.
“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity. For our leadership team, the focus is on preparing the firm to weather these headwinds," he wrote.
It is worth noting that the investment bank is going through a rough patch when it comes to its finances. As per the company’s Q3 FY22 report, their banking net sales are down 57 per cent year-on-year. Moreover, in Q3 FY22, the net revenues from corporate lending are down 77 per cent while equity underwriting is down 79 per cent as compared to Q3 FY21.
Interestingly, as revenues and profits are going down in the past years, the company’s headcount has gone significantly up. As per data from the company website, the employee headcount is over 49,000, up 34 per cent from 2018.
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The CEO noted in his letter, “We need to proceed with caution and manage our resources wisely.”
Goldman Sachs is not the only financial services company that is facing headwinds due to the ongoing economic slowdown. Morgan Stanley laid off 1600 people last month to cut down costs. Financial services giants like Deutsche Bank, Credit Suisse Group, Barclays, and others have also slowed down hiring in a bid to brace for the impending slowdown.
Business Today has reached out to Goldman Sachs for an official statement. The story will be updated as and when they respond.