Goldman Sachs will layoff: American company will lay off hundreds of employees to reduce expenses, will also slow down hiring.

To control expenses, Goldman Sachs Group is going to lay off hundreds of employees this month. Goldman had 47,000 employees at the end of the second quarter, compared to 39,100 in the past two years. The slowdown has impacted Goldman Investment Banking. Goldman’s shares are down more than 10% this year and about 15% compared to a year ago. The New York Times has published a report about this.

The New York-based firm said in July that it planned an annual performance review to slow hiring and cut job cuts by the end of the year. This is an attempt to rein in expenses. Reviews are commonly used to weed out the worst performing employees. Goldman may also slow down the pace of attrition-caused workforce reductions.

American companies stop expansion

Companies are halting their expansion amid concerns about inflation, a slowing economy, recession in the US and Europe, and the Ukraine-Russia war. Some companies, including Meta, Twitter and Tesla, have also slowed hiring amid uncertainty in the US market.

According to an August report by staffing specialist Xpheno, total active openings across Facebook, Apple, Amazon, Netflix, Microsoft and Google were less than 9,000. These six companies usually have more than 40 thousand active job openings. In view of the global trend, these companies have stopped hiring in India as well.

Recession and job connection

At the beginning of a recession, as companies face low demand, dwindling profits and high debt, many start laying off employees to cut costs. Rising unemployment is one of the many indicators that define a recession. In a recession, consumers spend less and industrial production also slows down.

What is the danger of recession on America?

Growth in the US slowed to an annualized rate of 0.9% during the June quarter of 2022. This was the second consecutive quarter that the US economy shrank. A survey of 49 US macroeconomists by the Financial Times and the Initiative on Global Markets predicts a recession by 2023. More than two-thirds of economists surveyed believed that a recession would occur in 2023.