Goldman Sachs is set to initiate another round of job cuts for underperforming employees. The potential for these cuts to take effect is as early as next month.
According to Financial Times, this upcoming action is a regular annual practice, usually resulting in job losses ranging from 1% to 5% of the total company workforce.
Goldman Sachs intends to focus on the lower end of this range within certain segments of its essential investment banking and trading divisions. The process is expected to kick off as early as late October.
A reduction of one per cent within Goldman Sachs' entire workforce, encompassing asset and wealth management, as well as operational positions, would amount to approximately 440 job cuts.
The strategic resource allocation, commonly referred to as SRA, was temporarily halted amid the Covid-19 pandemic. It resumed last year, coinciding with job cuts that fell toward the lower end of the historical range.
Managers throughout Goldman Sachs compiled lists of employees who may face potential layoffs, reported FT. The exact figures are yet to be determined and might be influenced by employees who voluntarily leave their positions before the layoffs are officially announced. Such voluntary departures would result in a reduction in the number of job cuts.
The company has already carried out significant job cuts this year. In January, Goldman Sachs reduced its workforce by approximately 3,200 employees, equivalent to 6.5 per cent of its total workforce.
This move aimed to cut costs in response to a significant downturn in investment banking activity and losses within its consumer banking division. Additionally, several senior executives resigned from the bank during this period.
Goldman Sachs reported a 35 per cent decline in net profit for the first half of 2023, and employees are anticipating another year of subdued compensation.