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Tech Companies Arent The Only Firms Cutting Staff. Goldman Is Preparing Layoffs Too.

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Tech Companies Arent The Only Firms Cutting Staff. Goldman Is Preparing Layoffs Too.

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According to media reports, Goldman Sachs plans to become one of the first US banks to lay off employees.

The layoffs will affect employees at the company, according to the New York Times and Bloomberg, citing people familiar with the plan.

Goldman Sachs (ticker: GS ), which could lay off workers as early as next week, has suspended its layoff program during the Covid-19 pandemic. According to the Times, it typically lays off 1% to 5% of its employees each year, depending on performance and other factors.

The stock was up 0.6% at $342.29 on Monday afternoon.

They are the first tech companies to lay off employees. Microsoft ( MSFT ) said it announced a small number of layoffs over the summer. Snap ( SNAP ), Netflix ( NFLX ) and Shopify ( SHOP ) also announced plans to save money.

For Goldman in particular, the problem may be a slowdown in business performance. At the end of July, deals worth about $1 trillion were announced in the US, according to Dealogic, down 40 percent from last year's peak season.

In an earnings conference call in July, the bank warned it would slow hiring as it reviewed its spending and investment plans. Dennis Coleman, head of finance, hinted that Goldman will return to its annual performance review at the end of the year. Cost cuts will take time to be reflected in results, he added.

Goldman disappointed employees last year with a pay raise. The bank paid an additional $4.4 billion in compensation for 2021.

Venture capitalist and Facebook board member Marc Andreessen tweeted in mid-April that all "big good companies are twice as big [and] big bad companies are four times as big or more employee".

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After the comment, more than 100,000 tech companies announced layoffs, according to Layoffs.fyi. By comparison, about 22 non-tech companies have announced layoffs since June — a number that could change if market conditions don't improve.

Email Karishma Vanjani at karishma.vanjani@dowjones.com.

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