Goldman Sachs Group Inc. aims to cut at least a few hundred more jobs as the Wall Street titan restructures its struggling consumer business and braces for an uncertain economy in the year ahead.
The bank is drafting plans that could eliminate at least 400 positions from its loss-making retail banking operations, according to people familiar with the matter.
Chief Executive Officer David Solomon has said he's dialing back the firm's ambitions for consumer banking. The latest cuts show the firm is moving beyond its annual exercise of weeding out underperforming staff, which was the focus just months ago. The CEO has recently also signaled he's reviewing other business lines to manage headcount and limit costs.
The firm is facing mounting pressure on expenses after spending significantly on technology and integrating operations, and as analysts predict the company's adjusted annual profit will fall 44 per cent.
The consumer unit's swelling costs, a slowdown in dealmaking and a slump in asset prices were enough to take a big bite out of the firm's bonus pool this year.
"We continue to see headwinds on our expense lines, particularly in the near term," Solomon said at a conference last week. "We've set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set."
A company spokesperson declined to comment. The plans are still being finalized, one of the people said, asking not to be named discussing internal deliberations.
Under Solomon, the New York-based firm has dabbled in acquisitions to beef up business lines outside its core Wall Street profit engine to build a more diversified company. That contributed to a surge in headcount. The bank's workforce surpassed 49,000 in this year's third quarter, up 34 per cent since the end of 2018. The bank doesn't break out how many people work in consumer operations.
The consumer business will halt loan originations in the coming months. Those unsecured loans were one of the most visible signs of Goldman's departure from catering to the financial elite. It gave the firm a taste of business on Main Street, like chasing down unpaid debts in local courts across the country.
The bank is still committed to growing its other highly visible product — high-yield savings accounts that have helped attract consumer deposits.
It is, however, turning off the beta rollout of a checking-account product that was meant for a mass retail launch before the restructuring. It's now reviewing whether and how to make that operational again for a narrower target audience.
The bank is also reviewing its installment-lending arm GreenSky — a venture Goldman finished acquiring in March. The space for such lending has gotten crowded at a time of mounting concern about the strength of the economy.
Investors were lukewarm about the deal when it was announced and have expressed concern as the business underperformed projections this year, the people familiar with the situation said.
In October, Goldman said it will wrap GreenSky into a new business line dubbed Platform Solutions, which also includes the firm's nascent credit-card unit and transaction-banking arm. Platform Solutions is expected to post elevated losses when its numbers are disclosed next month.