With a plan to remove approximately 3,200 employees this week, Goldman Sachs Group Inc. is starting one of its biggest rounds of job cuts ever, with the bank’s leadership going farther than its competitors, bloomberg has reported.
A person in the know of the situation said that the firm plans to begin the process in the middle of the week and that a maximum of 3,200 people will be impacted.
The fact that more than a third of those will probably come from its main banking and trading operations shows how extensive the cuts will be.
The company is also about to provide financial data for a new division that contains its credit card and instalment loan businesses, which will show pretax losses of over $2 billion, according to the sources who asked to remain anonymous because they were discussing private information, the bloomberg report said.
The company’s New York-based representative declined to comment. The addition of the non-front-office functions that were recently added to divisional staff has increased the reductions in its investment bank.
The bank is being forced to cut expenses as a result of slowdowns in several economic sectors, an expensive consumer banking venture, and an uncertain future for the markets and the economy.
Wall Street has seen a decline in merger activity and fees from raising capital for businesses, and a drop in asset prices has eliminated another source of significant income for Goldman from a year ago.
These larger industry trends have been made worse by the bank’s errors in its retail banking venture, where losses accumulated throughout the year at a considerably higher rate than anticipated.
According to expert projections, the bank now faces a 46% decline in earnings on around $48 billion in sales.