Goldman Sachs Group Inc. expects to put a tighter leash on hiring this year after embarking on one of the firm’s biggest rounds of job cuts ever, Chief Executive Officer David Solomon said.
(Bloomberg) — Goldman Sachs Group Inc. expects to put a tighter leash on hiring this year after embarking on one of the firm’s biggest rounds of job cuts ever, Chief Executive Officer David Solomon said.
“We have a much tighter hiring plan in 2023,” Solomon said at a Credit Suisse Group AG conference Tuesday. “We’re very focused on expenses.”
Goldman last month began implementing a plan to eliminate about 3,200 positions, or 6.5% of the bank’s headcount. The move was meant to address rising expenses and falling revenue and profit. Slowdowns in various business lines, an expensive consumer-banking foray and an uncertain outlook for markets and the economy are prompting the bank to rein in costs.
Merger activity and fees from raising money for companies have taken a hit across Wall Street, and a slump in asset prices has crimped another source of gains for the New York-based company. But Solomon said sentiment among chief executive officers has improved in recent months after predictions last year that the US economy was headed toward a possible recession.
“The consensus has shifted to be a little bit more dovish in the CEO community that we can navigate through this with a softer economic landing,” Solomon, 61, said at the conference. “The chance of a softer landing feels better than it did six to nine months ago.”
Goldman plans to host an investor day on Feb. 28, only the second in the bank’s history.
At the same conference, Morgan Stanley Chief Financial Officer Sharon Yeshaya said the “fog of uncertainty” is beginning to lift on business activity, which could give a boost to investment-banking fees.
Solomon’s counterpart at Bank of America Corp., Brian Moynihan, said at a BofA Securities Financial Services Conference Tuesday that consumers are still in a position of strength, even as inflation and other economic headwinds persist. Americans continue to spend, though the rate of growth in spending is slowing, and they still have capacity to borrow, the CEO said.
On the hiring front, Moynihan said Bank of America is focused on bringing expenses down and headcount back in line with historic norms, a reversal from the hiring “engine” that was “cranking” during the war for talent last year. Investments in digital platforms have helped keep headcount at branches flat even as interactions with customers rise, he said.
–With assistance from Katherine Doherty.
(Updates with Morgan Stanley CFO’s comment in seventh paragraph.)
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