Goldman Stock Up on Its Plans to Reduce Workforce Under SRA Strategy

Core Viewpoint - Goldman Sachs plans to eliminate over 1,300 employees, representing a workforce reduction of approximately 3% to 4% across various divisions as part of its annual performance review process aimed at removing low performers [1][2] Group 1: Layoff Details - The layoffs are a continuation of Goldman's strategy to maximize resources and maintain profitability in a volatile market, following a previous workforce reduction in January 2023 due to decreased deal-making activities [1][2] - Despite the layoffs, Goldman is projected to have a larger workforce in 2024 compared to 2023, indicating a potential recovery in business activities [1] Group 2: Performance Factors - In-office attendance has become a significant performance factor, with Goldman tightening its attendance policies after previously relaxing them during the pandemic [3] - An unsatisfactory incentive season for staff, particularly those involved in fewer deals in 2023, has contributed to the decision to lay off employees [3] Group 3: Economic Context - The Federal Reserve is anticipated to lower interest rates, which may impact Goldman's profit margins, prompting the bank to implement cost-cutting measures, including layoffs [3] - Other major banks, such as HSBC and Barclays, are also engaging in workforce reductions as part of broader cost-cutting initiatives to enhance profitability amid economic pressures [4][5] Group 4: Market Performance - Over the past six months, Goldman Sachs' shares have increased by 30.1%, outperforming the industry growth of 12.1%, reflecting a positive market response despite the layoffs [5]