Canada News

Goldman Sachs CEO David Solomon warns mass layoffs are just weeks away

Goldman Sachs bankers should enjoy popping the Champagne on New Year’s Eve — because the party will be over for many of them in 2023.

David Solomon, the investment bank’s CEO, warned mass layoffs will begin in the next few weeks in his annual year-end memo to staff.

“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,” Solomon said in a voice memo Wednesday.

Over the last month, Solomon has warned of “bumpy times ahead” and signaled he’s sharpening the ax to cut more people from the firm. But the email was a brutal reminder that the culling could be days away.

“There are a variety of factors impacting the business landscape, including tightening monetary conditions that are slowing down economic activity,” Solomon said. “We need to proceed with caution and manage our resources wisely.”

A spokesperson for Goldman Sachs declined to comment Thursday.

Goldman Sachs
Some bankers say they will consider resigning if they’re unhappy with their bonus.
Getty Images

Earlier this month Semafor reported the investment banking giant will lay off 4,000 “low performing” staff — roughly 8% of its workforce. Insiders noted it may ultimately be a smaller layoff than some are predicting.

‘We continue to see headwinds on our expense lines, particularly in the near term,” Solomon said at a conference this month. “We’ve set in motion certain expense mitigation plans, but it will take some time to realize the benefits.”

“Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set,” he added.

The year-end memo comes as profits at major banks slump and the top brass at those firms look to downsize their workforce amid a slowing economy. In September, Goldman chopped roughly 1% to 5% of underperforms.

While every bank on Wall Street is faced with troubling economic conditions, Goldman appears to be in a particularly precarious position. Earlier this week, The Post reported some Goldman partners believe Solomon isn’t up to the task of running the prestigious firm. Goldman is dwarfed in size by banks like Morgan Stanley and JPMorgan, and insiders feel Solomon hasn’t done enough to compete with the rivals, insiders told The Post’s Charlie Gasparino.

David Solomon
David Solomon recently warned that cost-cutting measures were imminent.
AFP via Getty Images

While Solomon has been warning of cuts over the last few weeks — both to the workforce and to employees’ compensation — it’s still hard for employees to accept this new reality given just a year ago they were preparing to haul in record bonuses.

This year, Wall Street payouts are expected to plummet by as much as 45% as financiers face economic headwinds and a looming recession, according to data from compensation consulting firm Johnson Associates.

Investment banking underwriters — who got the biggest bump in 2021 with bonuses surging 35% amid a jump in mergers and acquisitions — are going to see the biggest drop this year after deal-making fell off a cliff.

But as many in finance are just hoping to hold onto their jobs, some bankers are threatening to quit if they’re not happy with their bonus.

According to a survey by online social networking forum Fishbowl, 72% of the 1,096 bankers at top-tier firms polled said they would consider resigning if their bonuses are cut.

But bankers interviewed by The Post say they’re too nervous about the economy to even think about resigning.

“Everyone is on edge” one Goldman banker said and noted that most employees will be glad just to have a job even if their bonuses are disappointing.

Source link

Denial of responsibility! Today is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button