As part of its annual performance reviews, Goldman Sachs is preparing for hundreds of job cuts. The Bank is also likely to adopt cost-cutting measures and slow down hiring. As per media reports, the layoffs may begin next week.
Goldman Sachs had discontinued the annual performance reviews during the pandemic, but now it is resuming the same, considering the economic slowdown.
In June this year, the Bank had a 47,000-strong workforce, higher than the 41,000 it had last year. The financial institution has posted a 48 per cent reduction in quarterly profits.
Annually, the Bank is known to resort to strategic resource assessment or SRA, wherein about one to five per cent of the workforce is asked to leave based on their performance.
In July 2020, amidst the pandemic, the Bank had introduced a new grading system, which also required staff to undergo performance checks with their team leads and bosses at least thrice a year, with effect from 2021.
At the time, the Bank had expected one in every four employees to ‘exceed expectations’, and two in three to ‘fully meet expectations’. It had expected that only about 10 per cent of the low performers will fall under the ‘partially meets expectations’ category.
The Bank had, however, also maintained that this new system of performance management will only provide new opportunities for transparency in communication, feedback and coaching, and that it would not promote job cuts.