New Goldman Sachs layoffs surge past 1,000 as 4% of the bank giant’s workforce prepares to get laid off, the Wall Street Journal confirms.
David Solomon is making cuts once again.
The CEO of Goldman Sachs plans to eliminate over 1,300 jobs as part of the bank’s ongoing review aimed at removing underperformers, according to a report from WSJ.
This reduction will impact about 3% to 4% of Goldman’s workforce, which numbers around 45,000.
The layoffs have already begun and are expected to continue through the fall as part of a yearly process known as the “strategic resource assessment.”
Tony Fratto, a spokesperson for Goldman, stated that these annual talent reviews are standard procedures.
He also noted that the headcount is expected to be higher by the end of 2024 compared to last year.
Goldman typically aims to reduce its workforce by 2% to 7% each year based on performance metrics, market conditions, and financial outlook.
Last year’s review led to cuts affecting 1% to 5% of employees.
After pausing performance-related layoffs for two years due to the COVID-19 pandemic, Goldman reinstated them in 2022.
During the pandemic, the bank, like many others, allowed flexible work-from-home arrangements.
However, firms are now urging employees to return to the office and are tightening policies for those who don’t comply.
Solomon previously described remote work as “an aberration” that would be corrected soon.
In-person attendance is one of the factors considered during performance evaluations at leading banks.
The current layoffs follow a significant reduction of about 3,200 jobs in January 2023, driven by a decline in deal-making and reduced bonuses.
Despite concerns about a potential economic downturn and uncertainty surrounding the upcoming U.S. election, there are signs of optimism for a recovery.
Goldman Sachs reported a 21% increase in investment banking revenue for the second quarter compared to the same period last year.
Solomon mentioned in an earnings call that they are seeing early signs of recovery in capital markets and M&A activity.
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Other Banking News Today
Citibank now fires a whistleblower for ‘underperformance’, after the former employee provided records requested by the OCC.
Citi has filed a countersuit against its former employee, Kathleen Martin, alleging that she was terminated not for refusing to falsify records for the Office of the Comptroller of the Currency (OCC), as she claimed in her lawsuit from May, but rather for being unable to properly fulfill the duties of her role.
Martin, who was let go from her position as Citi’s interim data transformation chair in September 2023 after nearly two years with the bank, had alleged in her lawsuit that she was fired for not agreeing to Chief Operating Officer Anand Selva’s request to conceal information from the OCC that would make the lender “look bad.”
In a revised lawsuit, Kathleen Martin has accused Citi’s Chief Operating Officer Anand Selva of intentionally deceiving the bank by wanting to misrepresent Citi’s compliance metrics to the Office of the Comptroller of the Currency (OCC).
Martin claims Selva sought to conceal information from the OCC that would have made the bank “look bad.”
However, Citi maintains that Martin’s termination in September 2023 was not due to her refusal to falsify records, but rather because she lacked the necessary “leadership and engagement skills” to effectively execute the role of interim Data Transformation Chair, which she had been appointed to after the previous chair, Rob Casper, departed the company.
Citi asserts that during Martin’s interviews and assessment for the interim role, it was identified that she needed to improve in areas like her “dogmatic nature, lack of innovation and lack of experience driving the execution of complex change across Citi.”
Once Casper left, Citi’s senior leadership, including COO Selva, determined that Martin could not successfully fulfill the demands of the interim chair position.
According to Citi, COO Anand Selva tried to help the plaintiff, Kathleen Martin, improve her performance in the interim Data Transformation Chair role.
Selva allegedly set up one-on-one meetings and working groups to facilitate better collaboration and working relationships with stakeholders.
Selva’s HR team also provided Martin with a senior mentor to support her development.
In May 2023, Citi leadership discussed a plan to improve Martin’s performance.
In July, Selva conveyed Martin’s mid-year review before she raised any concerns about his behavior.
Soon after, Martin contacted HR and expressed fears about her job security.
Citi claims that Martin “felt her position was at risk,” but the bank asserts that internal documents showed she “exceeded expectations” and that CEO Jane Fraser had commended her for her “gravitas” and ability to build “strong relationships” at the bank.
However, Citi says Martin failed to heed the feedback provided, and she was ultimately removed from the Data Transformation Chair role because she lacked the “executive level relationships” and leadership needed to successfully execute the data transformation efforts.
Citi says the data transformation work was too critical for the bank to tolerate Martin’s underperformance.
Citi denies Martin’s claims that she protested the reporting of a key metric accurately or that Selva objected to it.
The bank says Selva and Martin met in September 2023 to discuss reporting certain metrics using red, amber, and green scales.
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