Goldman Sachs to sack 250 employees in coming weeks: Report

Goldman Sachs Group is expected to cut 250 jobs in the coming weeks, said a report. The layoffs are expected to be spread across seniority levels and include partners and managing directors, reported Reuters quoting a source on Tuesday.

A second source also said that the bank has kept its budget tight this year. Goldman laid off about 500 jobs last year as well.

Goldman had earlier reduced its headcount by about 3,200 in the first quarter. This was the biggest round of layoffs since the 2008 financial crisis for the investment bank. The mergers and acquisitions also fell to their lowest levels in more than a decade in the first quarter of 2023.

The move comes as a sluggish market for deals weighs on investment banking, which is a major source of revenue for Goldman Sachs. The bank's investment banking revenue fell 34% in the first quarter of 2023, compared to the same period a year earlier as the Federal Reserve raised interest rates aggressively to cool down inflation leading to a clouded economic outlook.

Chief Financial Officer of Goldman Sachs, Denis Coleman, said that the bank planned to improve its efficiency ratio by reducing headcount instead of replacing staff. This would help the bank to trim their expenses.

Goldman set a medium-term target for its efficiency ratio of 60 per cent versus 68.7 per cent at the end of March. Usually, Lower efficiency ratio is preferred by banks as an indicator of better profitability.

Goldman’s rival, Morgan Stanley, also planned to reduced its head count with about 3,000 jobs in the second quarter in its second round of layoffs, reported Reuters quoting a source.

(Inputs from Reuters)

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