The biggest US banks spent more than $1bn on severance costs during the first six months of 2023, underscoring the steep price of unwinding Wall Street’s overexpansion during the coronavirus pandemic.
Goldman Sachs, which has been hit particularly hard by the slowdown in trading and investment banking, on Wednesday became the latest big bank to take a charge for recent job cuts, telling investors it had spent $260mn in the first half of the year in severance costs. Goldman has laid off about 3,400 employees, or about 7 per cent of its overall staff, this year.
On Tuesday, Morgan Stanley, which has let go about 3,000 employees this year, said that it had spent more than $300mn on staff reductions. And Citigroup last week said that severance cheques have added $450mn to its expenses. The bank announced last month that it had nearly completed 5,000 job cuts.