American banking giant Goldman Sachs is planning to lay off more than 1,395 employees, or about 3-5% of its total workforce, several outlets have reported, citing sources.
The company said that this is part of its annual talent management process, which was conducted last year in September. Goldman Sachs had a workforce of 46,500 by the end of 2024.
According to the Wall Street Journal, the layoff strategy was conveyed by CEO David Solomon to senior executives. He mentioned that the firm had hired too many vice presidents in recent years, and the cuts are intended to improve efficiency.
The report noted that VPs who received poor performance reviews last year and small bonuses this year would likely be among those facing layoffs.
Layoffs Amid Record Profits
The job cuts come even as the American bank reported its biggest quarterly profit in more than three years. Goldman Sachs' profit climbed to $4.11 billion in Q4 2024, up from $2.01 billion a year ago.
Goldman's investment banking fees jumped 24% to $2.05 billion in the same period. Revenue from equity and debt underwriting rose 98% and 51%, respectively. The asset and wealth management arm saw its revenue increase by 8% to $4.72 billion, and revenue from the global banking and markets division grew by 33% to $8.48 billion in the fourth quarter.
However, the bank’s CEO, Solomon, as per the WSJ report, has been pushing for more efficiency. He has created a three-year program to help manage its expenses, among other things.
During its last routine performance review, Goldman Sachs reportedly laid off about 1,300 to 1,800 employees.
Notably, Goldman Sachs CEO David Solomon received an $80 million stock bonus to extend his tenure by five years earlier this month. Meanwhile, President and COO John Waldron, seen as a potential successor, also received an $80 million retention bonus and joined the board of directors.
