Goldman Sachs is embarking this week on one of its largest rounds of layoffs since the financial crisis.
Goldman began to lay off employees Tuesday as part of a plan that will see the firm shed up to 3,200 jobs, or roughly 6 percent of its work force, two people familiar with the situation said, who were not authorized to share this information publicly. It plans to notify the bulk of the affected employees on Wednesday, the people said.
The layoffs underscore the economic challenges facing the Wall Street giant, which is also trying to regain its footing after a costly push into consumer banking.
Goldman, like other major investment banks, had seen its fees soar during the pandemic, bolstered by a massive upswing in deal making, trading and related activities. But it has struggled to keep up the momentum as deals have slowed and markets have fallen. Investors have also sharply questioned the growth prospects of the consumer-lending business that the bank launched in 2016.
Shares of the company have fallen about 10 percent over the past year, giving it a market value of $120 billion. It employed 49,100 people at the end of September.
While most major investment banks have been forced to retrench, many of Goldman’s closest competitors have not yet announced so at a similar scale. Morgan Stanley in December cut about 1,600 employees, or 2 percent of its work force.
In October, Goldman Sachs announced a major restructuring that folded Marcus, its consumer-banking business, into a new division combined with its asset and wealth management businesses. That move was an effective retreat from the bet on consumer lending, which had struggled to gain traction.
Shortly before that announcement, Goldman restarted the practice of laying off underperforming employees, which it had paused during the early stages of the pandemic. It is unclear how many people lost their jobs in that round; this week’s layoffs are in addition to those cuts.
Last month, Goldman’s chief executive, David Solomon, warned investors of “headwinds” on costs, particularly because of inflation and spending to upgrade its technology.
Mr. Solomon said it would “continue to seek balance” between retaining people, the bank’s largest expense, and “an appropriate pay-for-performance mind set.”
Investment banking revenue in the United States is estimated to have plunged more than 50 percent last year, to nearly $35 billion through mid-December, according to the data provider Dealogic. That was a sharp contrast to 2021, one of the busiest and most lucrative for investment banks in more than a decade, with revenue of nearly $71 billion.