This post was last edited by at 2023-01-13

As uncertainty about the U.S. economic outlook increases, the wave of layoffs at U.S. companies is intensifying, following technology companies and spreading significantly to the financial sector, with a number of Wall Street investment banking giants joining the layoffs recently.


  According to Reuters, Wall Street's leading investment bank Goldman Sachs Group began laying off employees on January 11 to cut costs across the board, with about one-third of the staff coming from the investment banking and global markets divisions, of which the investment banking division faced the most serious cuts. It is reported that the number of layoffs is about 3,200, equivalent to 6.5% of the bank's approximately 49,000 employees, and is expected to be the group's largest layoff since the financial crisis.


  The Financial Times reported that Goldman Sachs is likely to see more staff departures in the coming weeks after the amount of its 2022 year-end bonus was disclosed, with investment banking staff expected to be reduced by 40%. Some Goldman Sachs employees are predicting that the disappointing bonuses will trigger a wave of resignations, which will help the bank cut costs as it will not have to pay severance for this group of employees.


  Also according to Bloomberg, BlackRock, one of the world's largest asset managers, plans to fire 500 employees, or about 2.5 per cent of its global workforce. This will be BlackRock's first layoff since 2019. In a staff memo dated 11 January, company executives said the company would "manage expenses prudently" and invest in a cost-effective manner.

  Bloomberg reported that BlackRock's stock prices have fallen sharply in the last year, and as of the end of the third quarter of last year, BlackRock had $7.96 trillion in assets under management.


  In addition, Morgan Stanley announced last month that it was laying off around 1,600 people globally, or about 2% of its total workforce, mainly in relation to its investment banking business, according to a number of US media reports.


  Against the backdrop of volatile capital markets, rapidly rising inflation and interest rates, the current sentiment among Wall Street investment banks about the US recession and a sharp decline in investment banking business is rising. This follows news that a number of Wall Street financial institutions have been laying off staff in recent months and that the trading boom on Wall Street is fading. Many Wall Street economists and analysts predict that the US economic situation will also continue to deteriorate as economic growth slows and the Federal Reserve raises interest rates to curb inflation.


  The wave of layoffs has also had a huge impact on the US Silicon Valley. Since last year, affected by inflation and the poor economic situation, the United States large technology companies began to pile up layoffs, Amazon, Twitter, Facebook's parent company "yuan" company, online taxi company Lifft, "read and burn" app parent company Snap, etc. have announced The company has also announced plans to cut jobs on a large scale. According to Crunchbase, a US business services database company, as of mid-November 2022, more than 67,000 employees in the US tech industry have been laid off in mass layoffs this year.


  Some analysts have pointed out that the "wave of layoffs" has exposed the impact of high inflation and soaring interest rates on corporate earnings in the US. The level of interest rates in the United States has climbed rapidly from near zero to the highest level since January 2008 within a year, negatively affecting its financial stability and economic recovery. Many economists and market institutions are predicting that the US economy is likely to fall into recession this year.