"Goldman Sachs' Managing Director Announcements Shadowed by 'Stealth' Layoffs
While Goldman Sachs celebrates the promotion of 608 employees to managing directors, a cloud of 'stealth' layoffs looms over the firm, according to insider sources. Unlike previous mass layoffs that made headlines earlier this year, these firings are characterized as discreet and smaller in scale, with the firm taking extra precautions to keep them under wraps. Described as 'mindful of morale,' Goldman Sachs aims to minimize the fear typically associated with layoffs.
Sources reveal that the cuts are primarily concentrated in asset and wealth management and global markets, with investment banking relatively unscathed. The range of affected employees spans from associates to managing directors. The restructuring follows the combination of asset management and wealth management groups last year, leading to redundancies such as the consolidation of marketing teams.
Managers reportedly compiled lists of approximately 440 potential layoffs across investment banking, trading, asset and wealth management, and operations over the last few months. Despite concerns among employees, the official decision to implement the layoffs was made in the past week.
Simultaneously, Goldman Sachs has been in the spotlight for announcing its new class of managing directors. While this class is 5% smaller than the 2021 promotions, it is larger than the 2019 cohort. The majority of promotions (47%) are in the global banking and markets division, with nearly a quarter in asset and wealth management. Despite a record number of promotions for women, the new class sees a slight dip in the representation of black and Hispanic employees."
"Goldman Sachs Initiates Fourth Round of Layoffs Amidst Profit Decline
Goldman Sachs has commenced its fourth round of layoffs in a year, signaling a continuation of its annual culling process. The bank had previously hinted at trimming a small portion of its workforce in September, targeting 1% of under-performers. These layoffs follow a series of brutal cuts, with the most recent round in June resulting in the termination of 250 employees, including 125 managing directors.
The move comes on the heels of a 33% profit plunge for Goldman Sachs in the third quarter, marked by ongoing losses from the divestment of its consumer lending business and lower-than-expected revenue from the asset and wealth management division. The bank has reported year-over-year profit declines for eight consecutive quarters.
Economic uncertainty has led to a decline in attrition, with individuals holding onto their jobs rather than seeking opportunities elsewhere. This trend, as highlighted by former Morgan Stanley CEO James Gorman, contributes to the need for layoffs as financial institutions grapple with a changing landscape.
Reports suggest that major banks, including Goldman Sachs and Morgan Stanley, have collectively cut 20,000 roles in the current year alone, with potential for further reductions. The challenging economic environment and sustained profit declines underscore the complexities financial institutions face as they navigate workforce adjustments in response to market dynamics."
"In conclusion, Goldman Sachs' initiation of its fourth round of layoffs within a year reflects the ongoing challenges faced by the bank in adapting to shifting market conditions. The decision follows a period of profit decline, with the third quarter seeing a significant 33% drop in earnings. The economic uncertainty and lower-than-expected revenue from various business segments contribute to the bank's strategic moves to streamline its workforce.
This latest round of layoffs comes amidst a broader trend in the financial industry, where major banks, including Goldman Sachs and Morgan Stanley, have collectively eliminated 20,000 roles in the current year alone. The dynamics of reduced attrition and the need to navigate a rapidly changing financial landscape underscore the complexities financial institutions grapple with as they seek to align their workforce with evolving market realities. As the industry continues to adapt, the coming months will likely see further adjustments and strategic measures aimed at sustaining operational resilience in the face of economic uncertainty."