Goldman Sachs set to slash bonuses for investment bankers by 40%

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Goldman Sachs may slash the bonuses of its roughly 3,000 investment bankers by 40% as the Wall Street giant grapples with an economic downturn that has affected the entire financial sector, according to a published report.

The massive chop would be considerably higher than Goldman’s rivals, including JPMorgan Chase, Citigroup and Bank of America — all of which are said to be mulling cuts of 30%, the Financial Times reported Wednesday.

“I think we’re going to be worse than the Street,” a senior Goldman banker told FT.

If implemented, the cuts would be the steepest since the 2008 financial crisis.

“Compensation at Goldman Sachs is determined by the performance of the entire bank, not within each business area,” a Goldman spokesperson said. “The compensation process is not yet completed so any discussion or forecast on specific numbers is premature.”

The prospect of steep cuts in bonuses has fueled concern that investment bankers could bolt Goldman after the new year.

CEO David Solomon last week said that Goldman could lay off more employees if economic headwinds persist.
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Goldman also plans to cut the bonus pool for its 400 partners by as much as 50%, the news site Semafor reported last week.

The reduced bonuses come on the heels of expected layoffs. Last week, Goldman CEO David Solomon said the firm may eliminate at least 400 positions from its loss-making retail banking operations, according to a report.

The bank reported a drop in revenue in 2022.
The bank reported a drop in revenue in 2022.
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Goldman cut around 500 jobs in September, an early signal to Wall Street that economic conditions were worsening.

It has been a difficult year for Wall Street’s investment banking divisions. JPMorgan reported a 47% year-over-year decline.

Earlier this week, Reuters reported that Citigroup was laying off 50 workers in its Europe, Middle East and Africa region after revenues from investment banking dropped by more than a fifth in the third quarter compared to the second quarter.

Citi’s year-over-year investment banking revenue tanked by 64% in the last quarter.

With Post wires

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