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The Goldman Sachs stall on the floor of the New York Stock Exchange, on July 16, 2013.Brendan McDermid/Reuters

Goldman Sachs Group GS-N will start cutting thousands of jobs across the firm from Wednesday, two sources familiar with the move said, as it prepares for a tough economic environment.

Just over 3,000 employees will be let go, one of the sources said, but the final number is yet to be determined. That scale of layoffs would be the largest since the 2008 financial crisis, one of the sources said.

The sources could not be named as the information was not yet disclosed publicly. Goldman Sachs declined to comment.

Bloomberg News reported on Sunday that Goldman would eliminate about 3,200 positions.

Goldman had 49,100 employees at the end of the third quarter, after adding significant numbers of staff during the coronavirus pandemic.

The layoffs are likely to affect most of the bank’s major divisions, but should centre on Goldman Sachs’ investment banking arm, one of the sources said. Wall Street banks have suffered a major slowdown in corporate deal-making activity as a result of volatile global financial markets.

Hundreds of jobs are also likely to be reduced from Goldman Sachs’ consumer business, Marcus, after it scaled back plans for the loss-making unit, the sources said.

The bank’s chief executive, David Solomon, sent a year-end voice memo to staff warning of a head count reduction in the first half of January, two separate sources said. Goldman Sachs declined comment on the memo.

The job cuts come ahead of the bank’s annual bonus payments which are usually delivered later in January and are expected to fall about 40 per cent.

The bank restarted its annual performance review process and staff cuts in September after pausing for two years during the pandemic.

The Wall Street giant typically trims about 1 per cent to 5 per cent of employees each year. These new cuts will come on top of the earlier layoffs.

Global banks, including Morgan Stanley and Citigroup Inc., have reduced their work forces in recent months as a deal-making boom on Wall Street fizzled out owing to high interest rates, tensions between the United States and China, the war between Russia and Ukraine, and soaring inflation.

Global investment banking fees nearly halved in 2022, with US$77-billion earned by the banks, down from US$132.3-billion one year earlier, Dealogic data showed.

The total value of mergers and acquisitions (M&A) globally had slumped 37 per cent to US$3.66-trillion by Dec. 20, according to Dealogic data, after hitting an all-time high of US$5.9-trillion last year.

Banks had executed US$517-billion worth of equity capital markets (ECM) transactions by late December, 2022, the lowest level since the early 2000s and a 66-per-cent drop from 2021′s bonanza, according to Dealogic data.

Despite the slowdown, Goldman’s top deal makers told Reuters in recent interviews that they are bullish on an M&A recovery in the second half of 2023.