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Goldman Revives Job Cut Plan After Coronavirus-Induced Pause

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The Goldman Sachs Group (GS - Free Report) is resuming plans to lay off about 1% of its workforce, which was earlier suspended following the coronavirus scare. About 400 jobs will be eliminated from across the company with no specific positions being affected more than others. The news was first reported by Bloomberg.

“At the outbreak of the pandemic, the firm announced that it would suspend any job reductions,” said a spokesman for Goldman Sachs. “The firm has made a decision to move forward with a modest number of layoffs.” he added.

Per the article, most the cuts to be undertaken are from back-office roles that had been “folded into bigger money-making divisions as part of an earlier reorganization”.

With the pandemic continuing around the world amid rising chances of being hit by the second wave, major banks including Citigroup (C - Free Report) , HSBC Holdings (HSBC - Free Report) and Wells Fargo (WFC - Free Report) have been forced to resume job cuts. This is because of the mounting pressure for cost reduction and challenging revenue scenario.

Notably, these layoffs form part of the $1.3 billion run-rate expense savings in three years announced during the Investors Day held in January. At the time, the investment banking giant had also unveiled plans to undertake reshuffling of the business units and a number of changes in management.

Goldman has put this move in motion as well. Per the plan, the merchant banking and asset management businesses are likely to be merged into a single segment. Eric Lane and Julian Salisbury will head the new unit.

Goldman seems on track to bolster its performance by focusing on capitalizing on new growth opportunities through several strategic investments, including the digital consumer lending platform. However, it continues to face probes and queries from several federal agencies.

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