Megabank Goldman Sachs is set to slash its wealthy workforce by targeting vice presidents in an annual round of layoffs.
A clue the cuts were coming came in the form of tiny bonuses dished out to VPs earlier this year, The Wall Street Journal reported. The mid-level execs were also hit with poor reviews late last year.
CEO David Solomon believes too many vice presidents were hired in recent years, the Journal reported.
The culling, which is expected this spring despite previously occurring in September, comes after many workers at the investment bank fumed about how small their end-of-year bonuses were in 2024.
Workers claimed that they had previously received 50 percent of their base salary in bonuses, but they believe that their compensation was trimmed so that the bank could bump up its quarterly and full-year earnings.
Goldman does an annual round of layoffs to cycle out the low performers, much like other big banks.
This year, about three to five percent of its workforce is expected to be cut.
Goldman’s overall head count, which was 46,500 at the end of 2024, is expected to remain flat this year.
The cuts are all part of Solomon’s mission to improve efficiency, a top priority for him.
Goldman Sachs CEO David Solomon is committed to making the investment bank more efficient through job cuts and AI investment
Shares of the Manhattan-based bank (headquarters pictured) have gained 48 percent in value over the last year
Solomon, who has been chief executive since 2018, said on a January earnings call that ‘we believe there are significant opportunities to drive further efficiencies.’
‘We’ve established a three-year program as a part of our business planning process that will help us dynamically manage our expense base, harness technology and automation, and reinvest in our businesses,’ he added.
Investors appear to believe in Solomon’s belt-tightening, rewarding Goldman with share growth of 48 percent over the last year.
Goldman, though having a smaller footprint than competitors like JPMorgan Chase, had a wildly successful 2024.
The bank saw a 16 percent revenue increase year over year, driven mostly by expansions in investment banking and markets, as well as asset and wealth management.
Goldman has also openly signaled it will continue to invest in artificial intelligence solutions that make the firm more productive.
This is expected to contribute to more job cuts in the future, mostly in operation and other back-office roles, the Journal reported.
Goldman recently introduced an AI assistant for bankers in what is likely to be the first step in a larger rollout.
