Goldman Sachs plans more job cuts

Goldman Sachs Group Inc has announced plans to cut more jobs as the challenging economic environment continues to impact dealmaking and trading revenue. The bank’s President and Chief Operating Officer, John Waldron, stated that the macro backdrop is extraordinarily challenging and did not specify the exact scale of the layoffs. This news caused Goldman Sachs shares to close down 2.3 percent.

In an effort to reduce payroll expenses, Goldman Sachs is expected to cut nearly 250 jobs in the coming weeks. The firm had already let go of approximately 3,200 employees in January, marking its largest reduction in headcount since the 2008 financial crisis. Waldron stated that these staff cutbacks will contribute to the bank’s target of reducing payroll expenses by $600 million, a goal set in February that may be surpassed by the end of the year.

Goldman Sachs anticipates a decline of 25 percent in revenue for both equities and fixed-income trading this quarter compared to the same period last year. Waldron attributed this decline to sluggish capital markets activity and muted levels of activity in equities and fixed income. Similar sentiments have been expressed by other Wall Street rivals, with expectations of notably lower trading results in the second quarter compared to a year earlier.

Additionally, Goldman Sachs is considering options for its fintech business, GreenSky, including a potential write-down on the $500 million goodwill. The bank is running a sale process for GreenSky and may also consider selling its loan book separately. The bank’s CEO, David Solomon, had previously championed the foray into consumer banking through its Marcus platform but struggled to gain traction against established players, resulting in significant losses.

Despite these challenges, Goldman Sachs aims to increase its financing revenue and seize market share as other lenders, such as regional banks, step back. The bank has already seen a $3 billion increase in financing revenue over the past three years and believes there is further room for growth in this area.

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