It wasn’t so long ago that investment banking giant Goldman Sachs (NYSE:GS) was hiring at a fever pitch. Trying to keep up with all the demand required a load of new employees. Now, with dealmaking plunging and the macroeconomic environment worsening, the company looks to lighten the load.
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Thousands of jobs are on the chopping block now and moving forward, and bonuses are also facing cuts. Goldman Sachs is down going into this afternoon’s trading, which suggests the market isn’t happy with the upcoming cuts. Reports suggest “thousands” of jobs are at risk in the near term. Further, the company is also considering a “sharp cut” to the bonus pool. It doesn’t end there, either. Sources from the company suggest that its Marcus consumer-facing unit will likely be pared back, and unsecured consumer loans are also about to exit the Goldman market.
The reports suggest that the layoffs will start in January, which prevents any potential bad press that tends to come with “fired just before Christmas.” Also, the layoffs will likely take place before a shareholder conference that will feature elements of management presenting upcoming performance targets.
The broader market isn’t taking the news of massive job cuts well. However, analysts seem largely unfazed by the move. The current consensus calls Goldman Sachs a Moderate Buy, with nearly three times the number of Buy ratings as it has Hold and Sell ratings combined. Thanks to the company’s average price target of $405.36, the company enjoys upside potential of 17.94%.
