Goldman Sachs is preparing for its annual workforce reduction, planning to cut between 3 percent and 5 percent of its employees this spring, as reported by InvestmentNews. Unlike previous years, when the investment bank typically conducted these layoffs in the latter half of the year, this round will take place earlier.

The job cuts will primarily affect vice presidents, a position where executives believe the firm has over-hired. Some employees reportedly received warning signs, such as lower-than-expected bonuses and unfavorable performance reviews. Financial news site eFinancialCareers first reported the development.

According to InvestmentNews, a Goldman Sachs spokesperson described the layoffs as part of the firm's "normal, annual talent management process" but declined to provide further details.

Goldman Sachs ended 2024 with a workforce of 46,500. While these cuts will reduce headcount, ongoing hiring efforts are expected to keep overall staffing levels stable. InvestmentNews reports that the firm has been carefully managing expenses after profitability struggles in certain business areas.

The latest reductions follow job cuts in 2023, which were largely due to a slowdown in dealmaking and the firm's decision to exit its struggling consumer banking division. However, with an improving economic outlook, Goldman recently reported its highest quarterly profit in over three years.

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