Goldman Sachs CEO David Solomon gathered his top executives in a closed-door meeting last week in Miami. The details of the meeting were leaked to Financial Times. Apparently, Solomon acknowledged his plan to lay off thousands of employees should’ve been enacted sooner.
“As the environment was growing more complicated in Q2 of last year, every bone in my body believed we should be much more aggressive in slowing hiring and reducing headcount,” Solomon said, according to one person with direct knowledge of what was said at the closed event.
Goldman fired 3,200 employees, or about 6.5% of its headcount last month. Many layoffs were in the investment bank’s core trading and banking units. The firings were the largest in its operational history.
Notice Solomon went on a hiring spree in recent years. Since the end of 2018, the headcount at the investment bank has jumped 34% to more than 49,000. Now the firing cycle is underway.
Solomon acknowledged at the event that if he were to reduce headcount earlier, such as in early 2022, the number of employees fired would’ve been less drastic.
Goldman’s net profits last year plunged nearly 50% from record earnings in 2021 due to lower investment banking fees, substantial markdowns at its asset management business, and losses in its financial technology segment.
Meanwhile, according to NYTimes, some board members of the investment bank are fed up with Solomon’s DJ career. Perhaps the CEO was blinded by DJ-ing, which is why he didn’t prepare Goldman sooner for a downturn.