Goldman Sachs is not planning any more unusual job cuts
Goldman Sachs has cut jobs twice this year, but it's not planning to make any more cuts - except for pruning underperformers as usual in the final quarter.
Speaking today on Goldman's conference call for its second quarter results, CEO David Solomon said he was glad that the firm had taken early "action" on headcount in January, but that he now feels "good" about costs for the rest of the year.
Although Goldman will resume its annual extraction of underperformers in 2023, Solomon said the bank isn't intending to make any further irregular layoffs. This was confirmed by CFO Denis Coleman, who said the bank has already achieved the $600m in payroll savings it planned.
Solomon's optimism comes after Goldman revealed that equity capital markets (ECM) revenues rose 133% year-on-year in the second quarter to a Q2 high; M&A revenues fell 46%, however.
Second quarter performance in Goldman's combined investment banking and sales and trading business was at a decade low, said Solomon, adding that this is not going to be the "new normal" and that in the past five to six weeks it's felt like business there is picking up.
Solomon said Goldman is "watching" the health of its investment banking business, but is in no hurry to cut more bankers and "erode that franchise" which is "a key franchise of the firm."
Instead of cutting heads, Solomon said the focus is instead on increasing efficiency through automation. Cutting people costs in the short term: Coleman said Goldman has spent $260m on severance payments so far this year.
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