Goldman Sachs is cutting about 125 managing directors globally as part of a cost-savings drive amid a slowdown in dealmaking. The cuts are expected to affect all levels of the investment banking division and could lead to additional job losses in other areas of the firm.
JPMorgan Chase and Citigroup are also reportedly planning to cut investment banking headcount. JPMorgan is targeting a reduction of 3% to 4% of its investment banking workforce, while Citigroup is looking to cut 5% to 7%.
The cuts in the investment banking industry come as dealmaking activity has slowed in recent months. The global M&A market was down 30% in the first quarter of 2023 compared to the same period last year.
The slowdown in dealmaking is being attributed to rising interest rates, geopolitical uncertainty, and the war in Ukraine. These factors have made it more difficult for companies to raise capital and execute mergers and acquisitions.
The layoffs at Goldman Sachs, JPMorgan, and Citigroup indicate that the investment banking industry is bracing for a challenging year ahead. The job cuts may put pressure on other banks in the industry and could result in further layoffs in the coming months.
Apart from the layoffs, Goldman Sachs is also planning to slow its hiring in investment banking, aiming for a 20% reduction in its hiring target for the year.
The cuts at Goldman Sachs are significant and are likely to have a ripple effect throughout the investment banking industry. They indicate that the industry is facing tough times and could lead to more job losses in the months ahead.
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