Goldman Sachs Begins Layoffs as Part of Annual Review Process

Goldman Sachs reportedly plans to lay off between 3% and 4% of its workforce — amounting to about 1,300 to 1,800 people — as part of its annual review process.

The layoffs have already started, will continue through the fall and are expected to be made across the bank’s divisions, the Wall Street Journal (WSJ) reported Friday (Aug. 30), citing unnamed sources.

Goldman Sachs spokesperson Tony Fratto told the WSJ, per the report: “Our annual talent reviews are normal, standard and customary, but otherwise unremarkable.”

Fratto added that the bank’s total headcount is expected to remain higher at the end of the year than it was in 2023, according to the report.

Goldman Sachs’ annual review process typically cuts between 2% and 7% of its workforce, with the percentage changing in different years depending on the bank’s financial outlook and overall market conditions, the report said.

Last year, the bank cut about 6% of its employees in January 2023, followed by more layoffs in May and the fall of that year, per the report.

Other banks have similar programs in which they cut workers they’ve determined to be underperforming, according to the report.

It was reported in April that the largest U.S. banks cut a total of more than 5,000 jobs during the first quarter to control costs in an uncertain economic climate. Citigroup made the biggest reduction, eliminating some 2,000 jobs during the quarter as part of a reorganization aimed at improving profits and reducing management layers.

Goldman has been sharpening its focus on investments, banking and other activities more geared to the markets after selling its GreenSky platform and continuing its pivot away from Main Street banking.

It was reported Aug. 17 that economists at Goldman Sachs lowered the likelihood of a recession, saying there’s a 20% chance of an economic downturn, down from 25%, based on recent retail sales and unemployment claims data.

Assuming the next jobs report — set to be released Sept. 6 — “looks reasonably good, we would probably cut our recession probability back to 15%, where it stood for almost a year” before a revision on Aug. 2, the bank’s economists wrote.