Goldman Sachs is gearing up for additional job cuts as part of a significant corporate transformation driven by artificial intelligence. This information was shared with employees in a company-wide memo, which was obtained by the Post.
The firm intends to “limit employee growth through the end of the year” and implement “limited reductions in company-wide roles,” as indicated in a memo released on Tuesday. Coincidentally, that same day, Goldman reported record profits for the third quarter.
“Even when our business performs well, it’s essential to review our operations and prepare for the future,” Goldman Sachs’ executives stated.
As of September 30, the bank employed 48,300 people globally—an increase of nearly 2,000 from the previous year.
Jennifer Zuccarelli, a spokesperson for Goldman, mentioned to the Post that they anticipate “net headcount additions across the board” by year-end.
This initiative comes with the rollout of a new phase in their One Goldman Sachs framework, known as OneGS 3.0, aimed at “transforming the firm’s operating system.”
Goldman has experienced considerable gains from market fluctuations this year, with revenue hitting $15 billion and earnings of $12.25 per share for the July-September timeframe, both surpassing expectations.
However, the memo suggests that the next growth phase hinges on harnessing AI to enhance productivity and streamline processes within the organization.
“Advancements in AI could greatly boost our productivity,” the memo indicated.
The company has detailed six primary goals under the OneGS 3.0 strategy: enhancing customer experience, raising profitability, driving productivity and efficiency, strengthening resiliency and scalability, enriching employee experience, and improving risk management.
To achieve these, the team plans to focus on “front-to-back workstreams” that could benefit from AI-driven changes, such as in sales enablement, customer onboarding, lending, regulatory reporting, and vendor management.
“To maximize AI’s potential, we must be faster and more agile in all our operations,” the memo noted.
Goldman’s leadership has openly acknowledged that automation is instigating structural changes across their business sectors.
In June, the Post reported on the debut of GS AI Assistant, an internal AI tool designed to aid bankers in summarizing documents, generating reports, and analyzing data. Chief Information Officer Marco Argenti noted that “thousands of employees are already using GS AI Assistant” to enhance productivity.
While the aim is to improve employee efficiency, concerns have arisen that entry-level and back-office jobs may soon vanish. A Bloomberg Intelligence study predicted that the finance sector could see up to 200,000 job losses in the next five years due to the implementation of AI systems.
Goldman’s planned job cuts align with broader industry trends, as rivals also embark on extensive cost-cutting measures. For instance, Morgan Stanley is set to reduce 2,000 positions, approximately 2.5% of its workforce, under new CEO Ted Pick. JP Morgan Chase is also implementing layoffs, impacting over 400 employees, including 88 staff members in Jersey City this fall.
In tandem with these moves, Citigroup is undergoing a major restructuring, cutting 20,000 jobs over two years. CEO Jane Fraser aims to streamline operations and invest in new technology, with projected savings of $2.5 billion annually by 2026.
