Goldman Sachs cuts over 1,300 jobs amid performance review

Goldman Sachs is undergoing a significant workforce reduction, with plans to cut over 1,300 jobs as part of its annual performance review process. This decision affects approximately 3% to 4% of the bank's 45,000 employees and is part of a broader strategy to eliminate underperformers. The layoffs, which have already begun, are expected to continue through the fall, aligning with the bank's customary practice of assessing talent annually. The bank's spokesperson emphasized that these talent reviews are standard and customary, despite the substantial number of job losses. Historically, Goldman Sachs has aimed to reduce its workforce by 2% to 7% each year based on various performance metrics and market conditions. The reinstatement of performance-related layoffs in 2022 followed a two-year hiatus due to the COVID-19 pandemic, during which flexible working arrangements were implemented. In addition to performance metrics, in-office attendance has become a critical factor in evaluations, as firms push for a return to traditional work environments. The recent layoffs follow a previous reduction of around 3,200 employees in January 2023, driven by a decline in deal-making and reduced bonuses. Despite these challenges, there are indications of a potential recovery in capital markets and mergers and acquisitions, as noted by the CEO during a recent earnings call. Goldman Sachs reported a 21% increase in investment banking revenue for the second quarter compared to the previous year, suggesting a positive outlook. The bank's stock has also performed well, rising nearly 32% this year, indicating resilience amid economic uncertainties and market fluctuations.