It may be the most wonderful time of the year but it’s also…Q4 layoff time. The latest: Goldman Sachs is planning to lay off as many as 4,000 employees, or roughly 8% of its workforce, Semafor reported yesterday.
Goldman Sachs also plans to trim or fully cut some employees’ year-end bonuses—which on Wall Street are a lot more than a $50 gift card to Macaroni Grill. Getting no bonus is called being “zeroed out” and is considered a strong nudge to quit.
Even so, Goldman Sachs’s workforce (currently 49,000) will remain bigger than it was before the pandemic (38,000). The bank hired aggressively in 2020 and 2021 while also suspending layoffs and buoying bonuses.
What’s changed? Deal-making, Goldman Sachs’s specialty, was more hyperactive than a seven-year-old chugging Mountain Dew during the pandemic, but has slowed this year. A lot. Just 74 companies IPOed in the US in 2022, the smallest number since 2009, per Axios.
Zoom out: Goldman Sachs may be getting hit especially hard because it’s more dependent on the fees it earns off deals than its Wall Street rivals. Still, Morgan Stanley laid off about 1,600 employees, or 2% of its workforce, earlier this month, and Citigroup and Barclays are also planning smaller cuts.