1. Goldman Sachs CEO expects large-scale layoffs in January 2023
According to Xinhua News Agency , David Solomon, CEO of Goldman Sachs Group, predicts that Goldman Sachs will begin large-scale layoffs in early January 2023.
Solomon wrote in a letter to employees: "We are reviewing it carefully and discussions are continuing. The layoffs are expected to occur in early January."
According to Bloomberg News, citing the content of the letter, Goldman Sachs is facing multiple challenges, including the "tightening of monetary conditions" triggering a U.S. economic downturn. The group's current focus is "preparing to go against the wind."
Earlier in December 2022, according to multiple foreign media reports, Goldman Sachs planned to lay off about 8% of its employees this time, which would involve nearly 4,000 people. Bloomberg reported on the 28th that the number of layoffs has not yet been finalized and may be lower than the above number. Data provided by
US Market Watch website shows that as of the end of the third quarter of 2022, Goldman Sachs had approximately 49,000 employees. The report quoted some senior managers at Goldman Sachs as saying that since Solomon took over as CEO in 2018, the number of Goldman Sachs employees has increased by 34%, an increase that is twice that of its main competitors.
The third quarter financial report released in October 2022 showed that Goldman Sachs’ net income fell by approximately 44% year-on-year, with revenue falling to US$11.98 billion from US$13.61 billion a year ago.
Bloomberg said that with the slowdown in activities such as mergers and acquisitions between enterprises and new share issuances, the income of many investment banks will drop significantly in 2022, causing large multinational financial institutions including Morgan Stanley, Citigroup , etc. to start laying off employees.
2. Why are investment banking giants also laying off employees?
We have seen that the famous American international investment bank Goldman Sachs is also going to carry out large-scale layoffs. Many people will be surprised. What is going on? How should we view the phenomenon of large-scale layoffs at Goldman Sachs?
First of all, we must understand that no matter how famous an investment bank is, no matter how high-end the investment banking business looks, it is ultimately a service industry. From the perspective of the service industry, if the entire market develops well and the market demand is great, these service industry companies will naturally have good market performance. But once the market does not develop well and there are certain downward problems in the market, any service industry company will be affected to a greater or lesser extent, especially leading investment banks like Goldman Sachs. If the current development of the entire capital market is not good, it is normal for Goldman Sachs to lay off employees. We have seen major problems arise in mergers and acquisitions and new share issuances between companies throughout 2022. Naturally, Goldman Sachs will actually suffer a certain business impact.
Secondly, what we see is that for the current entire US job market, the job market is actually in a relatively bad state. Goldman Sachs' inter-company mergers and acquisitions and new share issuances have been impacted, which actually represents the United States. The entire technology sector has been relatively sluggish throughout 2022. In such a downward and sluggish state of the entire market, Goldman Sachs is actually facing tremendous pressure. Large-scale companies represented by Morgan Stanley and Citigroup Multinational financial institutions are also laying off employees on a large scale, and are even withdrawing from some markets on a large scale. Therefore, for the current Goldman Sachs, he has no choice but to adopt a follow-up strategy and delay the layoffs until January 2023. In fact, this is also the result of Goldman Sachs's continuous choices and efforts.
Third, from the perspective of long-term market development, layoffs by American companies are actually a normal phenomenon. For most American companies, the current layoff measures or layoff logic are very consistent with their philosophy. They often They all use layoffs to reduce their own cost pressures, rather than through the logic of salary cuts. Maybe domestic companies are more likely to cut salaries when they face operating pressures, but American companies prefer to lay off employees and further enhance their market competitiveness through layoffs. This is a common practice among many American companies.This logic of Goldman Sachs is actually very normal, but Goldman Sachs has begun to lay off employees, and our economic analysis and judgment must also be re-estimated.
