Goldman Sachs is considering another round of job cuts over the next few weeks as the drought in dealmaking continues to weigh on performance.
According to Reuters, the layoffs – which would total not more than 250 – could include senior figures like partners and managing directors. The news was first reported by the Wall Street Journal.
The redundancies follow a larger round of layoffs made earlier this year, in which around 6 per cent of employees were let go – one of the largest job culls in its history. Goldman will be left with around 45,000 employees worldwide.
The bank could undertake a further round of job cuts in September when it does its annual performance-based review.
Wall Street banks have continued to suffer from the slowdown in dealmaking brought about by the Fed’s efforts to tame inflation. As interest rates have climbed to 5.25 per cent from zero in the space of little more than a year, dealmaking has dropped significantly.
According to Refinitiv data, mergers and acquisitions worth $1.4tn were announced in the second half of 2022, down from $2.2tn in the first half of the year.
In its most recent set of results, Goldman reported an 18 per cent fall in profit as investment banking revenue remained subdued. This followed one of the worst years in the bank’s storied history in 2022.
Back in February the lender identified about $1bn in savings, of which $600m came from the initial round of job cuts.
A range of other lenders including Morgan Stanley, Barclays and Citi have all announced their own cost-cutting measures as they grapple with falling fees.
While there is optimism that dealmaking will pick up again, many expect this will take some time to pick up. Morgan Stanley’s boss James Gorman said a resurgence in M&A would likely wait until the second half of this year or early 2024.
Goldman Sachs was contacted for comment.