The Daily Telegraph

Goldman axes hundreds of jobs to cut costs

Wall Street giant to rein in expenses around the world as it braces for a recession in the banking industry

- By Simon Foy

GOLDMAN Sachs is to axe hundreds of jobs globally as a recession chill hits the banking industry amid a slump in deal making.

The Wall Street giant is embarking on its biggest round of job cuts since the pandemic, which will result in several hundred job losses, including at least dozens in London, according to insiders.

The move represents one of the earliest examples of cost-cutting by a major investment bank as deal-making dries up and recession fears mount.

The New-york based bank paused its annual cull during the pandemic, but warned in July that it would need to rein in expenses because of a “challengin­g operating environmen­t”.

The review usually results in between 1pc and 5pc of its worst performing staff being let go and it is understood that this round of layoffs is likely to be at the lower end of that range.

Goldman employs 47,000 staff globally and around 4,000 in the UK, meaning at least 470 jobs will be axed overall with a minimum of 50 in the Square Mile.

The round of cuts, which was first reported by The New York Times, comes after a dramatic slowdown in investment banking activity this year as a highly lucrative pandemic-induced boom evaporated. Fees have plummeted as stock market listings and equity raises have also ground to a halt since February after Russia’s invasion of Ukraine spooked markets.

Between April and June, only 305 listings took place globally raising around $40bn (£33bn) in the process, according to the latest data from EY, a drop of 54pc and 65pc respective­ly on the same period last year.

London fared even worse. In the first six months of the year, only 13 initial public offerings got away, raising proceeds of just under $150m — declines of 71pc and 99pc. Last month, Berenberg, Germany’s oldest lender, axed more than 5pc of its employees in London. It also laid off nearly a third of its bankers in New York this summer, about 50 posts, citing difficult market conditions.

Between April and June, Goldman reported a 32pc surge in revenues from its trading arm, while investment banking revenues slumped by two fifths. Goldman declined to comment. Separately, HSBC’S finance chief also warned that the bank could unleash a series of “brutal cuts” as the economic outlook deteriorat­es.

Ewen Stevenson said: “We are seeing pretty broad cost inflation. Half of our cost base is fixed pay. We are thinking that we will have to materially step that up again in [2023] relative to [2022]. The only way to take that out, I think, is to be pretty brutal internally on costs.”

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