Newly unemployed Goldman Sachs workers are tapping head-hunters after losing their jobs in its biggest restructuring since the 2008-9 financial crisis, with a sluggish global economy set to make finding comparable roles a challenge, sources said.
Goldman (GS.N) stepped up laying off staff on Wednesday in a sweeping cost-cutting drive, with around a third of those affected coming from the investment banking and global markets division, a source familiar with the matter said.
The Wall Street titan’s rivals have also started to cut jobs as global banks prepare for recession and broader, deeper cuts are expected across the industry if deal-making activity remains weak.
At least 5,000 people are at risk of layoffs from various banks. In addition to the around 3,200 from Goldman, Morgan Stanley (MS.N) has cut about 2% of its workforce, or 1,600 jobs, a source familiar with the matter said last month, while HSBC (HSBA.L) is shedding at least 200, sources previously told Reuters.
The long-expected jobs cull at Goldman follows a recruitment drive during the pandemic, which saw the bank’s total headcount top 49,000.
But spiralling inflation and rising geopolitical tensions in the wake of the Ukraine war have led to a sharp decline in some critical investment banking activities, forcing cost-conscious bank bosses to prepare for leaner times.
“The series of downsizing at banks have pushed out hundreds of bankers and created even more competition in the local job market,” Arnaldo Oliveira, founder and chief executive of recruitment firm Orion Executive Search International told Reuters.
“Everyone at banks is anxious, no doubt. We have seen bankers at managing director level let go these past few days,” he said.
Some of those affected at Goldman are making contact with executive search firms and investment banking recruitment specialists, one headhunting source with knowledge of the matter said, while others are seeking opportunities on LinkedIn, the online professional networking platform.
Seth Johnson, an investment banking compliance officer based in Salt Lake City, UT, wrote on LinkedIn: “My role was among those impacted by Goldman Sachs’ large scale reduction today. There are a lot of things I will miss about that role, but I’m optimistic about the next chapter.”
Johnson, who was with Goldman Sachs for more than six years, declined to comment.
As news of the cuts impacting Goldman rippled across the world on Wednesday, the bank said it recognised the challenges for those moving on.
“We know this is a difficult time for people leaving the firm. We’re grateful for all our people’s contributions, and we’re providing support to ease their transitions,” a memo seen by Reuters and signed by Tony Fratto, the bank’s global head of communication, said.
The bank declined to comment on dozens of postings on LinkedIn from some of its sacked workers.
Oliveira said some bankers who have reached out to recruiters like him are considering ditching investment banking for other positions.
“They are even considering opportunities outside of banks such as M&A Advisory and Private Equity space,” he added.
A second London-based investment banking headhunter said having the Goldman Sachs brand on your CV will “always be helpful” but senior bankers were likely to find the job hunt more of a challenge.
Junior and mid-level bankers have options to pivot to buy-side and tech positions, the headhunter said, while dealmakers with experience in private equity were also considered most in-demand, with that segment of the global mergers and acquisitions sector seen likely to rally first.
“I come from a rural family so it has been one roller coaster of a journey, overcoming social and financial restrictions to come here,” Shilpi Soni, a Dallas-based software engineer who was with the bank for 19 months, wrote on LinkedIn.
“Knowing from where I started, being laid off hurts. But, I am still hopeful that this may not be the end of my journey here in the US.”
Soni did not immediately respond to a request for comment sent by Reuters through LinkedIn.