Why Did Goldman Sachs, Which Said Recession Risk Was Low, Lay Off Over 1,000 Employees?

Goldman Sachs Implements Layoffs Focused on Executives
Annually Reduces Workforce by 2 to 7 Percent Based on Performance Indicators
CEO: "Low Possibility of Recession Despite Uncertainties"

Goldman Sachs, a global investment bank (IB) based in the United States, announced plans to reduce its workforce by 3 to 5%. On the 4th (local time), Reuters cited anonymous sources reporting, "Goldman Sachs plans to carry out workforce reductions this spring, focusing on vice president (VP)-level executives," adding, "Out of Goldman Sachs' total 46,500 employees (as of the end of last year), at least 1,395 will be affected by this reduction."

Why Did Goldman Sachs, Which Said Recession Risk Was Low, Lay Off Over 1,000 Employees?

Goldman Sachs logo at the New York Stock Exchange. Photo by Reuters and Yonhap News.

Goldman Sachs conducts an annual review process known as the 'Strategic Resource Assessment (SRA).' It is known to aim to reduce the number of employees by 2 to 7% each year based on various performance indicators. The scope of layoffs has varied depending on market conditions and the company's financial outlook. In 2023, the bank began withdrawing from the consumer finance sector and carried out more than three rounds of layoffs totaling about 3,200 employees. It also conducted layoffs following a performance review in September last year.

Regarding this measure, Goldman Sachs stated that it is "a routine and annual talent management process" and did not attribute any significance related to the economic outlook. Bloomberg explained, "Goldman Sachs' workforce reduction is consistent with the bank's general approach to controlling costs and creating room to recruit new talent."

Earlier, David Solomon, CEO of Goldman Sachs, attended the Financial Review Business Summit held in Australia and forecasted, "Despite uncertainties surrounding global trade policies, the likelihood of the U.S. economy entering a recession is very low." He evaluated former U.S. President Donald Trump's tariff policies by saying, "President Trump firmly believes that trade imbalances exist and has a strong view to actively level them," adding, "He is acting according to that view." However, he added, "How exactly he executes that is part of the uncertainty I am referring to."