With investment-banking revenue plummeting and a recession looming, Wall Street is in retrenchment mode. The job cuts and hiring freezes that struck the tech world have made their way to the finance industry, with banking executives preparing for what’s expected to be an austere year ahead.
Goldman Sachs Group Inc., Morgan Stanley, Credit Suisse Group AG and Barclays Plc have all either already fired staff or announced that they plan to do so in coming months. Some smaller firms have even completed multiple rounds of terminations.
At the five biggest US banks, revenue from dealmaking and sales of new securities tumbled 47% in the first nine months of this year, meaning even the lucky bankers who manage to keep their jobs will probably take home much smaller bonuses. Though most are pessimistic about prospects for 2023, Wall Street executives aren’t sure how bad the economy will get, and are proactively pulling back on lines of business to get ready.
“You have to assume that we have some bumpy times ahead,” Goldman Sachs Chief Executive Officer David Solomon said Dec. 6 in a Bloomberg Television interview. “You have to be a little more cautious with your financial resources, with your sizing and footprint of the organization.”
Goldman Sachs is also dialing back its ambitions for its money-losing consumer business, and is facing pressure to cut costs after spending significantly on technology and integrating operations.
--With assistance from Hannah Levitt, Katherine Doherty, Jennifer Surane and Sridhar Natarajan.
This article was provided by Bloomberg News.