Goldman Sachs Group Inc is resuming job cuts as the coronavirus pandemic outlasts the financial industry’s resolve to offer jittery employees stability through the economic downturn.
The firm is embarking on a plan to eliminate about 1% of its workforce, or roughly 400 positions, according to people with knowledge of the matter, who asked not to be identified as the information isn’t public. The move comes even as the firm’s core trading and dealmaking businesses are booming.
Persistent outbreaks in the US are forcing the nation’s biggest banks to re-examine plans to wait out the turmoil as initially hoped. Wells Fargo & Co and Citigroup Inc were among the first to restart cuts after their stock prices slumped and as they face the prospect of souring loans. Even JPMorgan Chase & Co is joining the fray with a fresh round of reductions.
“At the outbreak of the pandemic, the firm announced that it would suspend any job reductions,” said Pat Scanlan, a spokesman for New York-based Goldman Sachs.
“The firm has made a decision to move forward with a modest number of layoffs.”
At JPMorgan, the most profitable US bank, executives have started hundreds of new cuts including about 80 jobs at the consumer unit and dozens more across other lines of business, according to a person briefed on the changes.
A spokeswoman confirmed the reductions are part of a review of resources the firm conducts each year. The bank had more than 256,000 employees at the end of June.
Financial firms across the globe, including HSBC Holdings Plc, have plowed ahead with reductions that were initially delayed by the pandemic. Insurer Allstate Corp on Wednesday announced a restructuring that brought 3,800 job cuts, and chief executive officer Tom Wilson said the firm had waited for signs the economy was improving.
Like some rivals, Goldman pledged to refrain from broad firings as the pandemic barreled down on communities across the US early this year and walloped the economy.
But the firm didn’t specify how long the moratorium would last. CEO David Solomon signaled the need for reductions in a June interview, saying he runs a business and that “we’ll do what is right for our shareholders.”
He noted the firm’s typical annual culls will have to resume heading into 2021 and beyond.
The cuts may be the start of deeper reductions in months ahead as the bank figures out how to proceed in the current environment toward hitting a target laid out in January to eliminate $1 billion in costs.
Many of the cuts in the current round are tied to back-office roles that had been folded into bigger money-making divisions as part of an earlier reorganization, one of the people said. Insiders at the time signaled that would grant division heads greater control over costs and likely lead to elimination of roles.