Taking stock | As profits plunge, Goldman Sachs slows down hiring and reviews underperforming staff

As profits plunge, Goldman Sachs slows down hiring and reviews underperforming staff

Amid ongoing cost-of-doing-business concerns, Goldman Sachs has ‘slowed down’ its recruitment plans and reintroduced annual performance reviews in a bid to weed out underperforming workers.

As reported by Bloomberg, the Wall Street behemoth’s CFO, Denis Coleman, told analysts during a recent conference call: “Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans to ensure the best use of our resources.”

Coleman added: “We’re taking a number of actions to improve our operating efficiency. Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward.”

In addition, the firm reportedly plans to bring back annual performance reviews for staff, which had been dropped during the pandemic.

Prior to their abandonment, these reviews were typically used to identify and weed out Goldman Sachs’ worst-performers.

The moves, Goldman Sachs CEO David Solomon explained, were part of a plan to more carefully manage the company’s resources, as rising inflation and tumbling profits continue to hinder the company. Indeed, the firm’s second quarter profits plunged from $5.3billion in the same period last year, to $2.8bn - a drop of 48%.

“I expect there’s going to be more volatility and there’s going to be more uncertainty and in light of the current environment we will manage all our resources cautiously,” he said.

Other major firms have also re-examined their hiring strategies due to the current economic uncertainty.

Last week, CNBC reported that Alphabet, the parent company of Google, would “slowing the pace” of its hiring plans for the rest of 2022.

CEO Sunder Pichai told employees in an email that it would reduce its hiring rate going forward, having taken on 10,000 new staff in the second quarter of this year already.

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