U.S. regulators have their eyes on Goldman Sachs Group Inc. — and the investment bank’s taking action.
Goldman Sachs is hiring hundreds of new staffers to help resolve concerns from authorities including the Federal Reserve, people with knowledge of the matter told Bloomberg. It’s not clear at this time what the specific concerns are, as it’s typical for large financial firms to navigate them privately when possible.
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The news follows multiple rounds of layoffs at Goldman since last year. The investment bank slashed about 500 jobs in 2022, 3,200 more in the first quarter of 2023 and announced another “fewer than 250 job” cut in May, per Reuters.
Goldman’s investment banking revenue decreased by 20% in the second quarter, and its overall profit dropped 58% year over year, CNN Business reported.
Although the slump is an industry-wide issue, Goldman has had it worse than its competitors, impeded by its formerly aggressive consumer-lending strategy and asset-management business, per The Wall Street Journal.
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Regulators often scrutinize large financial firms, but Goldman executives “privately describe” mounting pressure from the Fed this year, which could result in more rigid and arduous practices to make banks revamp their operations and procedures, per Bloomberg.
Another person told the outlet that Goldman has been handling a “confidential measure imposed by the Fed” that preceded this latest bout of scrutiny.
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