Goldman Sachs to go ahead with 'modest' job cuts after COVID-19 pause

Goldman Sachs to go ahead with 'modest' job cuts after COVID-19 pause

The Goldman Sachs company logo is seen in on the floor the New York Stock Exchange
The Goldman Sachs company logo is seen in on the floor the New York Stock Exchange in New York, on Apr 17, 2018. (Photo: REUTERS/Brendan McDermid)

NEW YOR: Goldman Sachs Group Inc plans to move forward with "a modest number of layoffs", a company spokesperson said on Wednesday (Sep 30), months after the Wall Street bank paused job cuts due to the COVID-19 pandemic.

Bloomberg News, which first reported about the layoffs, said the bank was looking to cut about 400 jobs, or roughly 1% of its workforce, citing people familiar with the matter.

"At the outbreak of the pandemic, the firm announced that it would suspend any job reductions. The firm has made a decision to move forward with a modest number of layoffs," a Goldman Sachs spokesperson said.

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, according to the Bloomberg report Goldman Sachs’ annual cull has long set it apart from Wall Street rivals, which tend to make mass layoffs periodically.

In January, Goldman said it was aiming for a 60 per cent efficiency ratio over the next three years, compared with 68 per cent in 2019. A lower efficiency ratio means a bank is better at managing costs relative to revenue.

Separately, the US Federal Reserve will curb big bank capital distributions through the end of the year, meaning the likes of JPMorgan, Citi, Wells Fargo and Bank of America will be barred from share buybacks and will have to cap dividends into the new year.

Shares of big banks fell between 0.5 per cent and 1 per cent in extended trade following the news. 

Source: Reuters

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