Goldman Sachs intends to fire underachievers in another round of layoffs.
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The Financial Times revealed on Thursday that Goldman Sachs (GS.N), citing persons familiar with the situation, is preparing for another round of layoffs for staff members who are judged underperformers. These layoffs might occur as early as late October.
According to the source, Goldman is aiming for a number at the lower end of the range in some areas of its key investment banking and trading divisions. The strategy would normally result in between 1% and 5% of company-wide employees losing their employment.
A source acquainted with the situation said that the bank does this exercise every year as part of performance appraisals. The study was stopped during the pandemic in 2020 and 2021, but the bank resumed it last year.
500 workers were let off by the bank in September 2022, according to a previous Reuters story that quoted sources.
When Reuters asked Goldman Sachs for comment on the report, the company did not get back to them right away.
Goldman's managing directors were summoned to meetings in June, when they received a stark warning: further cost-cutting measures will need to be taken.
The agendas of Goldman's top executives' meetings are becoming more and more constrained, which is another indication that the company's continuous efforts to reduce expenses by $1 billion are now picking up speed as management focus on progressively smaller line items and consider further layoffs.
In the first quarter, Goldman conducted its largest round of layoffs since the 2008 financial crisis, reducing its workforce by approximately 3,200 employees. In May, it also eliminated roughly 250 jobs.
