Investment Banking Giant Goldman Sachs to Cut Hundreds of Jobs as Profits, Revenue Dip

By Jacob J
September 13, 2022 23:26 +08

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Investment banking giant Goldman Sachs is cutting hundreds of jobs in a company-wide trimming of jobs to cut costs. The layoffs are coming weeks after the bank warned it is forced to trim expenses in the face of the worsening economic outlook. The layoffs will begin next week and employees across the company will be hit, BBC reported.

Earlier in July, Goldman Sachs had said that it was expecting lower profits and hinted at moderating its employee strength. "We have made the decision to slow hiring velocity," its chief financial officer had said at that time, IANS reported, citing the BBC.

Goldman feels the heat in Asia as IPO engine slows — A sign is displayed in the reception of the Sydney offices of Goldman Sachs in Australia, May 18, 2016. Reuters

48 Percent Plunge in Q2 Profit

Earlier this month, another banking giant, Credit Suisse, said it was cutting as many as 5,000 jobs as part of stringent cost-cutting measures. The jobs lost at the bank would comprise about 10 percent of the bank's entire workforce, according to a Reuters report. Thousands of Zurich-based positions will come under the axe, the report added.

Goldman Sachs reported a 48 percent plunge in its second quarter profit. Its investment banking revenue was $2.1 billion, a drop of 41 percent.

"There is no question that the market environment has gotten more complicated and a combination of macroeconomic conditions and geopolitics is having a material impact on asset prices, market activity and confidence," Goldman Sachs Chief Executive David Solomon told BBC.

More Companies Trim Jobs

With economic gloom catching up, several companies, especially, tech organizations, have either announced job cuts or frozen hiring.

Many Big Tech companies like LinkedIn, Meta, Oracle, Twitter, Nvidia, Snap, Uber, Spotify, Intel and Salesforce have either laid off employees or frozen hiring amid the global economic downturn.

Google executives have reportedly warned workers to either boost performance or prepare to leave. An internal message circulated among the employees warned that "there will be blood on the streets" if the next quarterly earnings are not good.

Shockingly, tech giant Apple laid off recruiters after warning earlier that an economic downturn was forcing a hiring freeze. Bloomberg News reported that as many as 100 contract workers have been fired, indicating the spending squeeze at the iPhone maker.

The development came two weeks after Apple reported record revenues in the quarter ended June 30.

In July, Microsoft laid off hundreds of employees ahead of its quarterly earnings and amid growing economic uncertainty. The move, the company said, was in a bid to "realign" groups and roles after the close of its fiscal year on June 30, even as the company intends to grow its headcount in the coming months.

Tesla said in June it was planning to axe 10 percent of staff, along with freezing hiring amid stalled Twitter deal, global macroeconomic conditions like chip shortage, rising inflation and high interest rates. Elon Musk had emailed Tesla executives, telling them the electric car-maker needs to pause hiring worldwide and cut its workforce by about 10 percent.

In early July, Meta boss Mark Zuckerberg warned employees that the company was facing one of the worst downturns in its history and that job losses are certain in the near future. The CEO of the tech giant that owns social media companies Facebook and Instagram said in uncertain terms there will be a scaling back of operations and employee departures owing to the tight financial squeeze the behemoth is facing.

Chinese tech giant Tencent said last week it sacked a whopping 5,500 employees after the June quarter revenue dipped 3 percent, which was the company's first quarterly revenue slip after listing.

Earlier in March, Reuters had reported that Alibaba Group and Tencent Holdings were preparing to cut tens of thousands of jobs combined this year.

Smartphone giant Xiaomi said last week it has cut more than 900 jobs as the Chinese economy is witnessing a slowdown. The smartphone giant had revealed that its revenues fell 20 percent in the June quarter. The layoffs affected nearly 3 per cent of Xiaomi's workforce, according to the South China Morning Post.