GS may Downsize up to 4000 Employees

Marcus Goldman established Goldman Sachs in 1869 in New York City. A multinational American investment bank and financial services provider, Goldman Sachs is based in the United States. Besides having regional offices across the country, Goldman Sachs has its main office at 200 West Street in Lower Manhattan. Since then, Goldman Sachs has expanded substantially. Even though at present, Goldman Sachs Group Inc.’s chief executive officer David Solomon claimed that the company is facing a decrease in earnings and sales, the company could lose as many as 4,000 employees or over 8% of its workforce. Further, the company’s shares have fallen 9.8% this year and fell 1.4% to $345.12.

A few identified reasons are responsible for the company’s degrading circumstances. The Wall Street juggernaut’s headcount has increased recently as Solomon finalised acquisitions to create a more diversified business. The segment suffered significant losses as a result of an expensive expansion into consumer banking, which coincided with a slowdown in the deal-making climate and falling asset prices. The cost bleed has also been caused by investing in technology and integrating processes. According to experts, the company’s adjusted annual profit could decrease by 44%. As management struggles to meet profitability goals, the projected layoffs would represent a significantly greater pullback than any plans published by Goldman’s competitors.

Subsequently, Solomon stated at a conference last week that although certain expense-mitigation initiatives have been put into motion, it will take some time for the advantages to materialise. No specific number of job cuts has been decided upon, and top managers have been asked to identify potential cost-reduction targets, according to a person with knowledge of the situation who wanted to remain anonymous while discussing internal deliberations. According to Goldman, Bloomberg’s retail banking division will lose at least a few hundred positions. The company’s annual exercise in culling out underperforming employees, which was in the spotlight just a few months ago. In the end, they will keep things flexible and size the company to fit the opportunity set.