Goldman Sachs intends to slash as many as 400 jobs in its consumer business division and limit its retail banking platform, Marcus, to corporate loans only, Bloomberg and the Financial Times reported in early December.
The cuts follow the bank’s announcement in October that it would be combining its expanded asset management and private wealth businesses into one group, the third time it has restructured since 2018.
In July, Goldman indicated that it would restore performance reviews, the annual employee assessments that could drive the lay-offs.
The new plan would put Marcus’ corporate business into a stand-alone entity, Platform Solutions, while its consumer loan operations would be redirected to the bank’s asset and wealth management unit. Marcus has been incurring increasing losses and consumer discontent with its performance, despite exceeding $100 billion in deposit balances in September 2021.
The bank’s projected profits will also fall 40% from 2021’s record, according to analysts.
“We continue to see headwinds on our expense lines, particularly in the near term,” Chief Executive Officer David Solomon said at a conference in early December, according to Bloomberg. “We’ve set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set.”
The retail banking market is competitive, and Goldman’s Marcus has had a hard time keeping up, some industry experts say.
“Goldman’s a company that’s achieved incredible success in its own right, and it tried to parlay that success into a market where it doesn’t enjoy the same kinds of core competencies,” said Richard Gardner, CEO of fintech firm Modulus Global. Marcus has “failed to break through the noise,” he said — the noise being Marcus’ many competitors in the increasingly popular digital retail banking and payments industry.