Goldman Sachs Begins Layoffs as Part of Annual Review Process: 2024 has initiated layoffs affecting 3% to 4% of its global workforce as part of its annual review process. These layoffs, expected to impact between 1,300 to 1,800 employees, are part of a standard practice that evaluates staff performance. This blog will explore the reasons behind the layoffs, their impact on the bank’s workforce, and how Goldman Sachs plans to maintain its overall headcount despite the reductions.
Table of Contents
Why Goldman Sachs is Conducting Layoffs in 2024
Goldman Sachs has begun its annual review process, which typically results in a reduction of 2% to 7% of its workforce. This year, the bank has opted to cut between 3% and 4% of its global employees, with layoffs already in progress and continuing through the fall. The review process, which was reinstated in 2022 after a pandemic-related pause, is part of Goldman Sachs’ strategy to eliminate underperforming staff and streamline operations. The bank’s spokesperson, Tony Fratto, emphasized that these reviews are a normal and customary part of the company’s operations, with the total headcount expected to be higher at the end of the year compared to 2023.
Goldman Sachs’ Strategy: Focusing on Core Investments
As Goldman Sachs moves away from Main Street banking, the company has sharpened its focus on core investments and banking activities. The sale of its GreenSky platform is a significant step in this direction, allowing the bank to reallocate resources to areas more aligned with its market-driven goals. The annual review process and subsequent layoffs are part of this broader strategy to maintain profitability and focus on high-performing areas.
Impact of the Layoffs on Goldman Sachs’ Workforce
Goldman Sachs’ workforce stood at 44,300 as of June 30. The current layoffs, affecting 3% to 4% of employees, will likely impact between 1,329 to 1,772 individuals. Despite these cuts, the bank plans to end the year with a higher overall headcount than in 2023. The layoffs are part of a standard performance-related review, which was reinstated in 2022 after a two-year hiatus due to the COVID-19 pandemic. Last year, similar reviews led to 1% to 5% of employees losing their jobs.
Comparing Goldman Sachs’ Layoffs to Other Banks
Goldman Sachs is not alone in its approach to controlling costs during uncertain economic times. Other major U.S. banks have also implemented layoffs, with more than 5,000 jobs cut in the first quarter of 2024. Citigroup, for example, eliminated around 2,000 positions as part of a reorganization to boost profits and reduce management layers. These cuts reflect a broader trend among financial institutions to streamline operations and focus on core business areas.
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Real-Life Example: Affected Employee’s Perspective
Consider an example of an employee at Goldman Sachs who has been with the company for five years. Despite consistent performance, the annual review process identified them as part of the bottom tier of performers, leading to their inclusion in the layoffs. This situation highlights the tough realities of working in a highly competitive environment where even slight underperformance can result in job loss.
Let’s Summarize…
Goldman Sachs has begun its annual review process, leading to the layoff of 3% to 4% of its workforce. This process, reinstated after a pandemic-related pause, is part of the bank’s strategy to focus on core investments and streamline operations. While the layoffs are difficult for those affected, Goldman Sachs aims to maintain a higher overall headcount by the end of the year.
Frequently Asked Questions
Q: Why is Goldman Sachs Begins Layoffs?
A: The layoffs are part of the bank’s annual review process to eliminate underperforming employees and streamline operations.
Q: How many employees are affected by the layoffs?
A: Goldman Sachs is cutting between 1,300 to 1,800 employees, amounting to 3% to 4% of its global workforce.
Q: Will Goldman Sachs’ total headcount decrease by the end of the year?
A: Despite the layoffs, Goldman Sachs expects its total headcount to be higher at the end of 2024 than it was in 2023.
Q: How does Goldman Sachs’ layoff process compare to other banks?
A: Like Goldman Sachs, other major banks have also implemented layoffs to control costs, with over 5,000 jobs cut across U.S. banks in the first quarter of 2024.
Q: What areas is Goldman Sachs focusing on after the layoffs?
A: Goldman Sachs is concentrating on core investments and banking activities, moving away from Main Street banking.
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