This 153-Year Old Company With 44,000 Workforce Will Start Firing Employees: Find Out Why?
Banking major Goldman Sachs is planning to fire hundreds of its employees as early as next week.
It and several other firms have also been laying off employees en masse in fears of a looming recession.
Return to pre-pandemic practices
Goldman Sachs’ layoffs is a return to its annual practice which was halted the last two years due to the pandemic.
The Wall Street giant typically trims about 1% to 5% of its staff each year, and the 2022 cuts will likely be in the lower end of that range, said a source
Pre-layoffs the company’s headcount had grown to more than 47,000 globally, at the end of June.
This was a 15 per cent increase from the similar period last year.
Experts believe that the firm could fire as many as one to five per cent of its low-performance employees.
This means a loss of a job for around 500 to 2,400 employees.
In July, during an earnings call, Chief Financial Officer Denis Coleman had warned that the company might slow hiring due to cost cutting as the economic outlook worsens.
Other banking majors on Wall Street such as Citigroup, JPMorgan Chase & Co, Wells Fargo & Co. have also terminated the contracts of their employees to downsize.
“Best use of resources”
“Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans to ensure the best use of our resources,” said Coleman.
“Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward, though these actions will take some time to be reflected in our results,” he further added.
Coleman said that the company recorded a 48 per cent slump in quarterly profit, forcing it to make tough decisions.
Factors affecting companies
Aside from cutting costs due to an impending recession, there are several other factors burdening companies all over the world like uncertain macroeconomic conditions, the ongoing Russia-Ukraine war and sky-high inflation.
Aside from restarting the annual tradition of trimming down the employee count, Goldman Sachs is also expected to bring back its annual performance review policy for employees by year end.