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Investing.com – Hours after a wave of employee layoffs dogged Twitter after Elon Musk took over as president of the company, a surge that hit Amazon (NASDAQ:) Meta and other tech giants.
Goldman Sachs (NYSE:) was reported to begin cutting thousands of jobs at the firm starting Wednesday as it prepares for a tough economic environment next year.
According to reports, the job cuts are expected to slightly exceed three thousand, but the definitive number has not yet been determined and the wave is expected to start in the middle of this week, which could affect 7% of the bank’s employees.
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3200 required
Goldman had 49,100 employees at the end of the third quarter, after adding a large number of employees during the coronavirus pandemic, and the new surge is expected to affect about 3,200 jobs.
One of the sources said the layoffs are likely to affect most of the banks’ major divisions, but should focus on Goldman Sachs’ investment banking division.
This comes after institutional banks experienced a significant slowdown in corporate trading activity due to volatility in global financial markets.
Hundreds of jobs were also likely slashed from Goldman Sachs’ loss-making consumer business after it scaled back plans for its direct-to-consumer unit Marcus, the sources said.
Solomon’s message
According to the news, two separate sources said the bank’s CEO, David Solomon, sent an audio memo to employees at the end of the year warning of layoffs in the first half of January.
The job cuts come ahead of the bank’s annual bonus payments, which are usually delivered later in January and are expected to fall by around 40%.
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reduction program
Goldman Sachs resumed its annual job cut program in September, which had been suspended for two years during the pandemic.
The Wall Street giant typically cuts 1% to 5% of its staff each year, with these new cuts adding to those layoffs.
banking crisis
Investment banking fees nearly halved in 2022, Dealogic data showed, as banks earned $77 billion globally, down from $132.3 billion a year earlier.
The total value of mergers and acquisitions globally fell 37% to $3.66 trillion by Dec. 20, according to Dealogic data, after hitting an all-time high of $5.9 trillion last year.
Banks executed $517 billion in capital markets (CME) operations by the end of December 2022, the lowest level since the early 2000s and down 66% from a 2021 deal, according to data Dealogic.
