This round of cuts comes before the bank doles out its annual bonuses for 2022, which make up a major portion of investment bankers’ salaries. Base salaries for senior bankers can range from hundreds of thousands to millions of dollars, while their bonuses can be double or triple their base.
Last month, Mr. Solomon warned investors of “headwinds” on costs, particularly because of inflation and spending on business operations. Mr. Solomon said the bank would “continue to seek balance” between retaining people, the bank’s largest expense, and “an appropriate pay-for-performance mind-set.”
Even for those who keep their jobs, this year’s bonus season is expected to be grim. Across Wall Street’s largest banks — Goldman, JPMorgan Chase, Citigroup, Bank of America, Morgan Stanley and Barclays — bonuses are expected to drop by as much as 30 percent to 50 percent from last year.
Investment banking revenue in the United States is estimated to have plunged more than 50 percent last year, to nearly $35 billion through mid-December, according to the data provider Dealogic. That was a sharp contrast to 2021, one of the busiest and most lucrative for investment banks in more than a decade, with revenue of nearly $71 billion.
The banks are set to offer more insight into their numbers for the year starting on Friday, when JPMorgan Chase, Wells Fargo and Bank of America report their fourth-quarter results. Analysts expect the numbers to be disappointing.
Goldman is set to report its earnings next Tuesday. In February, it will hold its annual investor day, during which the bank plans to lay out “specific metrics so everyone can clearly track our progress as we go forward,” Mr. Solomon said last month.
“Even in the midst of a difficult operating environment, we continue to work hard to strengthen the firm,” Mr. Solomon said. “We know progress is never a straight line, but we’re excited about the opportunities ahead.”
