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Goldman Sachs (GS) Plans to Cut Thousand Jobs Amid IB Plunge
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The Goldman Sachs Group, Inc. (GS - Free Report) plans to lay off thousands of employees to survive the current uncertain economic conditions. Per a source familiar with the matter, the number of jobs that will be affected is being discussed and further details will be finalized early next year.
According to the source, the move includes hundreds of employees that are being eliminated from the company’s consumer business. GS wants to step back from its consumer business and, hence, has been planning to eliminate at least 400 jobs from its loss-making retail banking operations.
In addition to this, the bank plans to stop originating unsecured consumer loans.
In October, GS signaled that it was scaling back its ambitions for Marcus, the loss-making consumer unit. Notably, Marcus was moved into Goldman Sachs’ wealth management arm as part of a reorganization of the company’s main business units.
The bank’s latest job cut plans come after it cut about 500 employees in September, after pausing the annual practice for two years during the pandemic.
With the latest move, Goldman Sachs joins Wall Street firms like Citigroup (C - Free Report) and Morgan Stanley (MS - Free Report) , who are also slashing jobs as the overall investment banking performance has become weak amid a decline in total deal volume and deal values because of the constant rise in interest rates, the war between Russia and Ukraine, and the red-hot inflation.
This year witnessed a slowdown in mergers and acquisitions, and share offerings, which have negatively impacted investment banking revenues.
In addition to eliminating dozens of jobs across its investment banking division, Citigroup has been emphasizing growth in core businesses through streamlining operations internationally.
Likewise, Morgan Stanley has been trying to restructure operations and focus more on less volatile revenue sources, which have started bearing fruits. MS is focusing more on the wealth management and investment management segments as these are less dependent on the capital markets.
Over the past year, shares of Goldman Sachs have lost 6.8% compared with a decline of 7.9% recorded by the industry.
Image: Bigstock
Goldman Sachs (GS) Plans to Cut Thousand Jobs Amid IB Plunge
The Goldman Sachs Group, Inc. (GS - Free Report) plans to lay off thousands of employees to survive the current uncertain economic conditions. Per a source familiar with the matter, the number of jobs that will be affected is being discussed and further details will be finalized early next year.
According to the source, the move includes hundreds of employees that are being eliminated from the company’s consumer business. GS wants to step back from its consumer business and, hence, has been planning to eliminate at least 400 jobs from its loss-making retail banking operations.
In addition to this, the bank plans to stop originating unsecured consumer loans.
In October, GS signaled that it was scaling back its ambitions for Marcus, the loss-making consumer unit. Notably, Marcus was moved into Goldman Sachs’ wealth management arm as part of a reorganization of the company’s main business units.
The bank’s latest job cut plans come after it cut about 500 employees in September, after pausing the annual practice for two years during the pandemic.
With the latest move, Goldman Sachs joins Wall Street firms like Citigroup (C - Free Report) and Morgan Stanley (MS - Free Report) , who are also slashing jobs as the overall investment banking performance has become weak amid a decline in total deal volume and deal values because of the constant rise in interest rates, the war between Russia and Ukraine, and the red-hot inflation.
This year witnessed a slowdown in mergers and acquisitions, and share offerings, which have negatively impacted investment banking revenues.
In addition to eliminating dozens of jobs across its investment banking division, Citigroup has been emphasizing growth in core businesses through streamlining operations internationally.
Likewise, Morgan Stanley has been trying to restructure operations and focus more on less volatile revenue sources, which have started bearing fruits. MS is focusing more on the wealth management and investment management segments as these are less dependent on the capital markets.
Over the past year, shares of Goldman Sachs have lost 6.8% compared with a decline of 7.9% recorded by the industry.
Image Source: Zacks Investment Research
Currently, GS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.