Goldman Sachs Plans 1,300 Job Cuts, Stocks Surge 32% Despite Ongoing Market Challenges

• Goldman Sachs will lay off 1,300 employees in its annual review, resuming performance-based cuts post-pandemic.
• Despite recent job cuts, Goldman Sachs expects a larger workforce in 2024 compared to 2023.
• The bank’s stock has surged 32% this year, outperforming market averages despite ongoing layoffs.

Goldman Sachs is set to reduce its workforce by over 1,300 employees, according to a recent report. This move is part of the bank’s annual performance review process. The decision marks a return to performance-based job cuts, reinstated in 2022 after a hiatus during the COVID-19 pandemic.

Routine Review and Workforce Reduction

The annual review at Goldman Sachs is a standard procedure, aimed at addressing low performance among employees. A spokesperson for the bank confirmed that while these reviews are routine, they are expected to result in a notable reduction in staff. Last year, similar reviews led to a reduction of 1% to 5% of the workforce. 

As of June 30, Goldman Sachs employed 44,300 individuals globally. Despite recent workforce reductions in 2023 due to lower dealmaking activity and prolonged high interest rates, the bank anticipates a larger workforce in 2024 compared to this year.

Improved Financial Performance and Market Conditions

Goldman Sachs has recently experienced improved financial performance. The bank reported a profit increase for the second quarter, attributed to strong debt underwriting and fixed-income trading. 

This boost in profitability comes amid a more favorable operating environment for banks. The U.S. economy’s resilience has emboldened corporate executives to engage in deals, debt sales, and stock offerings. Nonetheless, dealmaking activities remain below historical averages despite the industry’s recovery.

Stock Performance and Market Response

In response to the announcement, Goldman Sachs’ stock showed positive movement. Shares closed 0.6% higher after initially turning positive in afternoon trading. The stock has surged 32% this year, outperforming broader markets and an index of rival large-cap banks.

 Reports indicate that the layoffs, which have already begun, are expected to continue through the fall. They may ultimately affect 3% to 4% of Goldman Sachs’ workforce, totaling over 1,300 employees.

This structured approach reflects the bank’s ongoing efforts to align its workforce with its strategic and financial goals while adapting to changing market conditions.