Wall Street investment bank Goldman Sachs (GS) is planning to cut up to 5% of its global workforce with a focus on its vice presidents.
According to a report in The Wall Street Journal, Goldman Sachs CEO David Solomon has told senior executives that the firm hired too many vice presidents in recent years and its time to cut. The new round of staff reductions aims to improve the bank’s efficiency and financial performance.
Between 3% and 5% of Goldman Sachs’ workforce is expected to be cut in the new round of layoffs. The investment house ended 2024 with 46,500 employees worldwide, which means that 1,395 to 2,325 workers are expected to be let go.
Culling the Herd
Vice presidents who are likely to be let go have already received poor performance reviews and smaller bonuses. Employees who left as a result are being counted towards Goldman’s layoffs. The bank culls its low performers each year in an effort to boost the firm’s performance, reputation and financials.
CEO Solomon has been vocal about prioritizing the investment bank’s efficiency, especially in the face of stiff competition on Wall Street. Solomon has created a three-year program to help manage Goldman’s expenses and staffing. The firm has also narrowed its focus in recent years to two main divisions: investment banking and markets.
GS stock is up 52% over the last year.
Is GS Stock a Buy?
The stock of Goldman Sachs has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on 11 Buy and four Hold recommendations assigned in the last three months. The average GS price target of $680.36 implies 17.52% upside from current levels.
