Amid economic uncertainty that is gripping Wall Street, Goldman Sachs may cut bonuses for approximately 3,000 investment bankers, according to a recent media report.
The Financial Times published a report on Wednesday, citing a senior source inside the investment firm, that chief executive David Solomon is considering slashing the bonus pool by at least 40%.
Previously, the outlet reported that rival firms JPMorgan Chase, Citigroup, and Bank of America, might go through with a 30% cut. “I think we’re going to be worse than the Street,” a senior Goldman insider told the Financial Times.
In September, Goldman Sachs laid off 500 employees as the financial sector continued to be rocked by the economic downturn. If implemented, the bonus cuts would be the largest since the 2008 financial crisis.
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“Compensation at Goldman Sachs is determined by the performance of the entire bank, not within each business area,” a Goldman spokesperson said in a statement to FT. “The compensation process is not yet completed, so any discussion or forecast on specific numbers is premature.”
Moreover, the report also indicates that Solomon may also look to cut costs by cutting an additional 400 positions from the firm’s retail banking department. The cuts come on the heels of consistent underperformance in investment banking as JPMorgan faces a 47% year-over-year decline.
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As a sector, investment banking fees have declined so far this year by 35%, according to Refinitiv.
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