Goldman Sachs expected to begin one of the largest rounds of layoffs in its history

The world’s major investment banks experienced a boom in 2021 and early 2022 as companies embarked on a slew of mergers and acquisitions following the coronavirus lockdowns.

However, the number of acquisitions has fallen significantly as interest rates have risen and corporate valuations have plummeted, The Guardian reported.

Goldman Sachs quickly expanded faster than its rivals during the boom and did not adopt the usual practice of firing the worst performers. the general manager, David Solomontold staff late last month that the cuts were necessary to “weather the headwinds” caused by rising interest rates.

The cuts are expected to be concentrated in the investment banking division, where fee income has fallen, and the consumer division, where ambitions for the underperforming Marcus brand have been scaled back, though most of the bank’s divisions are likely to be affected.

The loss of 3,200 jobs would represent about 7 percent of the bank’s global workforce of 49,000. Bloomberg News, which first reported the proposed size of job cuts, said the bank would continue to hire juniors.

Goldman had reportedly considered losing as many as 4,000 jobs. It is also thought to be considering cuts to its bonus pool of up to 40 percent.

The job and bonus cuts will allow Solomon to show signs of action for the bank’s shareholders when it reports its full-year results on Jan. 17.

Goldman is expected to report its second-best full-year earnings since 2009, but investors are concerned that the bank’s shares are trading at a discount to rivals such as Morgan Stanleyaccording to The Guardian.

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