What Do Goldman Sachs Job Cuts Mean for Job Seekers?

This month, #goldmansachs will start laying off staff in a major restructuring move. Up to 3,200 job cuts are expected worldwide. Even though numerous investment banks benefited from an increase in M&As during 2021 and early 2022 due to pandemic restrictions easing worldwide, interest rates and company valuations have decreased, resulting in fewer takeovers, #mergers, plus less debt and equity underwriting. IPO activity saw a dramatic change. Global IPO deals fell 46% by mid-2022 alone, meaning less demand for GS’ services.

In October 2022, GS stated its investment banking revenues dropped 57% in Q3, to $1.6 billion 💸🙀.

CEO David Solomon mentioned last year that Goldman Sachs is looking into shifting its focus to consumer banking to be less reliant on investment banking and volatile trading.

When the #mergersandacquisitions boom occurred, GS capitalised on the growth and expanded as a result. However, it chose not to let go of staff at the time. In 2020, Goldman Sachs had 40,500 employees, 43,900 in 2021, and 47,000 by mid-2022. Solomon recently remarked that cuts were needed now to “weather the headwinds” resulting from rising interest rates. Though job cuts are expected to be around 3,200, it is still possible it could be as much as 4,000 in the coming months.

Bonus pools are also expected to be cut by as much as 40%. This would be the biggest cut since the financial crisis of 2008. GS’ 3,000 investment bankers are expected to bear the brunt of this.

On the bright side, GS has predicted that 2023 will see China’s GDP grow to 5.2% (from 3.0% in 2022), with growth mainly expected for the second half of the year. Morgan Stanley has expressed similar sentiments about China’s growth. In October 2022, GS, launched a Chinese infrastructure joint venture with the aim of boosting investment in real estate assets and logistics, as it firmly believes in the future of the Chinese market.  

So what does this mean for job seekers, especially if you want to get into #investmentbanking?

1️⃣ Keep applying to multiple positions, don’t target only one area. Keep an eye out for application deadlines and note which companies have applications going on a rolling basis.

2️⃣ Be open to starting in a position that may not exactly be the field you want. The point is to accumulate experience first. You can gain transferrable skills and pivot to another field later on.

3️⃣ Remain up to date about China’s economic activities. Several banks expressed optimism at China’s re-opening and HSBC, for example, is aggressively expanding operations within Asia.

What do you think? Remember to hit 👍 share, follow, and comment!

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