According to reports, Goldman Sachs, one of the most prestigious investment banks in the world, is planning to cut up to 8% of its employees starting next year. This move signals potential hardships ahead for investment bankers not just at Goldman, but across Wall Street.
Wide-ranging cuts coming at Goldman
The layoffs at Goldman are expected to impact bankers across divisions when they happen in January 2023. Front office roles like investment banking and trading, as well as back office positions, are said to be affected. The cuts could end up being smaller than 8% if enough employees leave voluntarily before then.
Investment banking sector faces challenges
The planned cuts at Goldman Sachs reflect a broader slowdown in investment banking revenues this year after a boom in 2020 and 2021. Dealmaking has declined significantly, weighing on firms’ profits. With the economic outlook uncertain heading into 2023, banks are looking to trim costs, which often means cutting jobs.
Young bankers may struggle to find new roles
For junior to mid-level investment bankers who lose their jobs at Goldman or other banks, finding new positions may prove difficult amid industry-wide belt tightening. The most experienced rainmakers will likely land on their feet, but younger bankers face a tougher road ahead.
In summary, Goldman Sachs’ plans to cut up to 8% of staff highlights troubles brewing for the investment banking industry. Bankers at all levels face job losses and a potential shortage of new opportunities as banks reduce costs to prepare for slower business conditions.