Goldman Sachs will layoff hundreds of employees in the retail banking sector to focus on asset management-oriented businesses, including high-value asset managers and institutional investors, Bloomberg reported on the 12th (local time).
Goldman Sachs is reportedly planning to layoff hundreds of additional employees in the retail banking sector after the massive restructuring it launched in September. The exact number of laid-off workers has yet to be revealed, but at least 400 jobs are expected to be lost, Bloomberg said.
Goldman Sachs is also expected to stop new personal loans through the Internet personal loan platform “Marcus,” which was launched in 2016. Bloomberg explained that Goldman Sachs is virtually committed to withdrawing its private retail banking business and growing a high-yield savings deposit sector for high-income wealthy people.
Goldman Sachs seems to have made the decision to make up for losses in its investment banking business. Goldman Sachs’ net profit in the third quarter of this year was $2.96 billion, down 44% from the same period last year. This was largely due to a 57% drop in net profit in the IB sector compared to the previous year.
It is also known that it has not made much profit in the retail finance sector. Goldman Sachs earlier entered the retail banking business in 2016 to diversify its IB-oriented profit structure, but analysts say it faced worsening profitability as business operating costs increased and consumers’ transactions slowed down due to the economic recession.
On the other hand, net profit rose 18% in the asset management sector. Goldman Sachs plans to reorganize its business focusing on asset management services that focus on high-value asset owners in the future. Existing organizations that were divided into four sectors: retail finance, asset management, IB, and platform solutions will be merged into three. The retail finance business for general consumers is expected to reorganize fintech company GreenSky, which was acquired in October, into a “platform solution” department and let the department take charge of it.