Why is gs laying off so much

GS headcount before the 2021 hiring craze: mid-30,000s 

GS headcount now: high 40,000s

Return to normal

Shitman Ballsachs 

Over hiring during pandemic. No deal flow. Losses from Marcus/Consumer banking. Goldman puts survival above all else and macro signals are flashing red right now. 

Pressure from shareholders. Sucks to work for a publicly traded company sometimes.

GS management wants to (1) reconcile with a significant drop in deal activity compared to 2020-21, and (2) offset billion dollar losses from their failed attempt to break into consumer banking. Shareholders would get salty at quarter end if GS didn't do this.

Do y'all think this just a GS thing? Other banks have done layoffs on much smaller scales already, but wonder what's ahead

My guess is it is mainly driven by $$$

Because there's no dealflow and IPOs are down 90%+ and we're in a recession

Obviously deal flow down everywhere but GS is clearly taking this to a higher extreme than most (anyone?) else at this point.

Part of it is just being publicly traded - a private shop can weather some down quarters without anyone really caring, whereas a public company has quarterly earnings reports that they need to worry about. IMO, this is one of the big perks of being at an independent / non-public bank. My guess is other BBs will certainly follow here

GS also tried to grow super aggressively over the past few years (both IB and non IB) and are now feeling the pain as the economy tanks

A bank is not only its IBD part, though this forum focuses a lot on IB. Look at JPM, which is publicly traded, yet a whole different narrative than GS in terms of earnings reports. When shareholders expect return, it's on the entire bank (including asset management, commercial, wealth, securities, etc) and JPM has the largest amount of deposits and sticky commercial lending, which protects/hedges against economic downturns in advisory businesses. ie; take commercial lending / credit cards as an example. Just look at the amount of Chase cards in everybody's wallet. This lending space is actually the top line driver for JPM. In times of rising interest rates, JPM's revenue grows bc it charges higher interests on its top line. This cushions against IBD losses. During 2020-2021 GS had been a powerhouse in IBD, which drove its top line and return to equity. They made adjustments such as increased employment during the good years. But now in the bad years, when IBD is down bc of macro conditions/recession/no deals, this makes it really hard for GS to find ways to save return to equity holders besides cutting costs in the form of layoffs.

MS is similar to GS in that it doesn't have a heavily BS driven business model like JPM/BofA, and are likely to fall to layoffs as well. Though they did not make that billion dollar loss of a misguided attempt of commercial expansion as GS did, which really did GS dirty last Q