Goldman warns on job cuts as BofA slows hiring

Morgan Stanley is embarking on a fresh round of job cuts as rival banks sounded caution that a looming US recession will dampen hiring.

Goldman Sachs Group Inc. Chief Executive Officer (CEO) David Solomon said the bank may have to prune staff in certain areas and exercise caution with its financial resources amid mounting economic uncertainty. As fewer Bank of America Corp. employees decide to leave, the company is slowing hiring in an attempt to manage headcount ahead of a downturn, CEO Brian Moynihan said during an interview with Bloomberg Television Tuesday.

Morgan Stanley will reduce its global workforce by about 1 600, amounting to roughly 2 percent of the total, according to a person familiar with the matter. The bank had more than 80 000 employees at the end of the third quarter, compared to about 60 000 just before the pandemic began.

The statements underscore the pain sweeping the US with layoffs and hiring freezes extending beyond the technology industry where Facebook parent Meta, Amazon.com Inc. and Apple Inc. have begun shedding jobs or pausing hiring.

“You have to assume that we have some bumpy times ahead,” Solomon said in an interview. “You have to be a little more cautious with your financial resources, with your sizing and footprint of the organization.”

Goldman’s business lines are closely linked to the economy, and the bank has forecast slowing growth ahead. That would mean the New York-based firm will have to make some tough decisions, Solomon said, especially since a soft landing is far from assured. Solomon said the US could see a recession in 2023, even though the bank’s economists say it could still avoid one. – Bloomberg