“Reality is starting to set in”said Jacobs, referring generally to job cuts across the financial sector.
His comments, made at Goldman Sachs’ US Financial Services Conference, echo those of bank executives who on Tuesday were bracing for a deterioration in the economy next year as inflation threatens demand for consumers.
Morgan Stanley will cut about 2% of its workforce, a source familiar with the situation said on Tuesday. That translates to about 1,600 employees. Its rivals Goldman Sachs Group Inc and Citigroup Inc have also cut staff.
Elsewhere on Wall Street, BlackRock Inc, the world’s largest asset manager, has also frozen hiring, except in critical positions.
As the economic outlook worsened, large US lenders have set aside more contingency funds to prepare for defaults, according to their third-quarter results. Results for the fourth quarter will be released next month.
“When I talk to our customers, they seem extremely cautious,” David Solomon, chief executive of Goldman Sachs, told investors on Tuesday.
The executive president of Bank of America, Brian Moynihan, cited the bank’s research that anticipates a “negative growth” in the first part of 2023, but said the contraction will be “mild.” The company can reshape its workforce quickly by rotating and eliminating vacant positions, he added. (Reporting by Manya Saini and Noor Zainab Hussain in Bengaluru; additional reporting by Lananh Nguyen in New York Editing in Spanish by Javier López de Lérida)
Source: Ambito
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