Goldman plans new round of job cuts

Goldman Sachs Group Inc. is preparing to trim its workforce for the second time in just three months, as a moratorium on firings during the pandemic gives way to a push to improve efficiency.

This round isn’t expected to exceed the roughly 400 positions the bank began eliminating in September, according to people with knowledge of the matter. But executives expect to go deeper in the coming year, in what could eventually amount to one of the most significant staff reductions at the bank as it looks to deliver on a promise to rein in costs.

Big U. S. banks including Goldman Sachs pledged early this year to refrain from broad firings as the pandemic erupted across the country. The industry’s resolve has frayed as the virus has persisted, leaving executives to refocus on earlier cost- cutting initiatives. Goldman laid out a target in January to eliminate more than US$1 billion in expenses, and it’s been examining how to meet that goal.

A spokeswoman for the bank reiterated its statement from September. “At the outbreak of the pandemic, the firm announced that it would suspend any job reductions,” the company said at the time. “The firm has made a decision to move forward with a modest number of layoffs.”

Goldman, which typically culls its underperforming executives from the workforce every year, had already backed off from that annual exercise in an attempt to reassure jittery employees in an uncertain economic environment. With the pandemic dragging out and no certain end date, its leaders have reversed course and expressed a willingness to return to business- as- usual and take away the safety net.

The firm will also probably accelerate the shift of jobs away from its central financial hubs into other cities such as Dallas to control costs. While the plans were under way even before the virus raced across the globe, the pandemic has given the bank’s leadership confidence that it can shift more roles to smaller locations than it had previously planned, one of the people said.

Financial firms have plowed ahead with job reductions that were initially delayed by the pandemic. That includes the nation’s biggest banks, including Wells Fargo & Co. and Citigroup Inc., which were among the first to restart cuts after their stock prices slumped.

Unlike its larger peers, Goldman’s operations benefited from virus- related upheaval that brought a windfall to trading desks and new business to its investment bankers. Senior leaders have been reluctant to use the cushion of a few good quarters to delay steps tied to snipping costs as they seek ways to boost the stock price.