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HomeEconomyGoldman warns of new job losses in 'tougher environment' on Wall Street

Goldman warns of new job losses in ‘tougher environment’ on Wall Street


Goldman Sachs is preparing for “a tougher environment” by laying off more employees, which could help the company surpass a $600 million savings target from job cuts, one of the bank’s top executives said Thursday.

Goldman President John Waldron’s warning underscores the increasingly bleak outlook for Wall Street as rising interest rates have dampened merger activity and the IPO market, while a recent trading boom has also fizzled out.

“Activity levels are definitely more muted. That’s kind of what we expected. We are now taking additional targeted actions with our workforce,” Waldron told investors at an industry conference hosted by AllianceBernstein. “We are running the business more tightly and preparing for a tougher environment.”

The Financial Times and others reported on Tuesday that Goldman is considering cutting fewer than 250 jobs at the bank, mainly at the chief executive level, and may seek another round of performance-based cuts in September. Other banks, including Morgan Stanley and Lazard, have also announced significant job cuts.

With revenue under pressure, Waldron said Goldman was on track to meet and exceed the $600 million payroll savings goal the bank set in February.

Goldman’s investment banking business, which had two stellar years in 2020 and 2021, has struggled recently. The unit’s sales in the first three months of 2023 were down 26 percent from a year earlier.

Waldron said the bank’s earnings from trading equities and fixed income in the second quarter were “slightly more than 25 percent lower” than a year earlier, when Goldman’s commodities business benefited from volatile energy markets following Russia’s full-scale invasion of Russia. Ukraine and central banks started raising interest rates.

Waldron noted “quite a risk bias” from institutional investors heading into the US debt ceiling deliberations, which are nearing completion, while the company’s CEOs are also “quite cautious.”

“They are probably pleasantly surprised by the resilience of the demand function, especially on the consumer side. But generally quite careful in their planning ahead.”

Goldman’s main growth strategy is focused on the new combined wealth and asset management division, which CEO David Solomon hopes will eventually deliver more stable earnings that investors appreciate.

“For me, the wealth and asset management transition, the business transformation that’s going on there, is a key value to unlocking opportunities for the company,” said Waldron.

Merry C. Vega is a highly respected and accomplished news author. She began her career as a journalist, covering local news for a small-town newspaper. She quickly gained a reputation for her thorough reporting and ability to uncover the truth.

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