Goldman Plans Second Round Of Layoffs Ahead Of “Significant Staff Reductions” In 2021

In the immediate aftermath of the covid pandemic, and just before the Fed injected $3 trillion into the system to make sure no financial firms fail ever again, US banks took the unusual step of expressing virtue signaling solidarity with their workers and promising nobody would be let go for the foreseeable future. Well, the foreseeable future ended in just a few months, because around mid-summer, the first round of layoffs hit, with tens of thousands of bankers suddenly finding themselves obsolete in a world of “lower rates for much longer.”

Well, fast forward to today, when we just moved to round two with Bloomberg reporting that Goldman Sachs is set to trim its workforce for the second time in just three months, as a “moratorium on firings” during the pandemic gives way to a push to improve efficiency, i.e., aggressive cost cutting just before bonus season.

While this particular round isn’t expected to exceed the roughly 400 positions the bank began eliminating in September, Bloomberg sources said that this is just the beginning as the bank expects to “go deeper” in 2021 in what could “eventually amount to one of the most significant staff reductions at the bank as it looks to deliver on a promise to rein in costs.”

A Goldman spokeswoman told Bloomberg that “The firm has made a decision to move forward with a modest number of layoffs”, after earlier in the year it announced that it would suspend any job reductions.

The layoff should not be a surprise: in January Goldman laid out a target to eliminate more than $1 billion in expenses, and it has been examining how to meet that goal. And with hundreds first then thousands of pink slips about to be unleashed, it appears to have found the right formula.