Goldman Sachs is doing a little spring clearing and will cut staff by 3% to 5% in an annual performance review process intended to weed out underperformers. The cuts will largely fall on junior bankers with the vice-president rank, according to a source familiar with the matter.

At the end of 2024 Goldman had about 46,500 employees globally. That means the planned cuts will impact between 1,395 and 2,325 employees.

Goldman traditionally removes about 5% of its workforce every year, but slowed that process during the Covid-19 pandemic and the subsequent “war for talent” when banks and other financial services companies boosted pay for first, second and third year employees in a bidding war.

Goldman returned to its annual cull in September. This year the bank is initiating the cuts earlier in the year, which is more in line with the traditional timing, the source said. Last year the cuts were closer to 3% than 5%. This year the cuts are expected to be closer to 5%.

The bank’s compensation and benefits expense rose to US$16.7bn last year.

While the rebound in investment banking appears to be sputtering in the first quarter, particularly in M&A, the staffing cuts are not related to the banking outlook.

"This is part of our normal, annual talent management process," a spokesman said.

Source: IFR