Goldman Sachs chief executive David Solomon gave a negative opinion on the economic outlook and said that smaller bonuses and even potential job cuts should come as no surprise.
“You have to assume that difficult times lie ahead,” Solomon said in an interview with Bloomberg Television on Tuesday. “You have to be a little more careful with your financial resources, the size and footprint of the organization.”
That may mean increased cost focus and a hiring slowdown, which Goldman has already embarked on.
“This could also happen due to pruning in some areas,” Solomon said.
Goldman’s business model is closely tied to the economy, and the bank has forecast slower growth ahead. That would mean the company will have to make some tough decisions, Solomon said.
especially since a soft landing is far from guaranteed.
Additionally, the Goldman Sachs CEO said the US could see a recession in 2023, though the bank’s economists say the US could still avoid one.
“It shouldn’t surprise people – looking at how economic activity has gone this year: 2021 has been a
Outstanding year,” said Solomon. “2022 is a different year, and so naturally the fee will be lower.
The US bank has cut costs to protect profits from a more expensive-than-expected incursion into consumer banking, as well as the global economic slowdown, which is straining negotiations.
“One has to expect that activity levels will be a little more limited in a more challenging economic environment,” Solomon continued.