Goldman Sachs has begun rolling out a new approach to workforce reductions this month, replacing the annual mass layoff that Wall Street employees have braced for every fall with a continuous, performance-driven process that will phase cuts through the summer of 2026, according to internal communications first reported by Bloomberg. Bloomberg’s reporting, based on internal memos, described the first wave as beginning in May 2026; no Goldman Sachs spokesperson has publicly confirmed that specific timeline.
The change affects Goldman’s workforce of roughly 46,500 people, based on the firm’s most recent public filings. For years, the bank followed a rigid annual ritual: managers identified the bottom 3% to 5% of performers, typically in the fall, and let them go in a single concentrated sweep. Under the new model, those same reductions will be distributed across months, driven by ongoing performance reviews, shifting business needs, and cost targets that now factor in savings from artificial intelligence tools.
From one big cut to a steady drumbeat
The transition did not happen overnight. In early 2025, Goldman pulled its annual layoff cycle forward on the calendar, catching some employees off guard months earlier than expected. That was the first public signal that leadership considered the old approach too rigid for the pace at which the business was changing.
Later that year, an internal memo told staff that additional cuts were planned within the same calendar year. The language was pointed: “headcount constraint” and a “limited reduction in roles.” The firm was not simply rescheduling one event. It was layering multiple rounds of reductions on top of one another.
By May 2026, the pattern has hardened into policy. Managers are now expected to evaluate teams on a rolling basis, with exits triggered by performance data, evolving business priorities, and cost benchmarks. The annual big-bang layoff, as Goldman employees knew it, is effectively over.
AI enters the workforce planning conversation
Goldman’s internal communications have cited efficiency gains from AI as part of the rationale for tighter headcount controls, according to the Bloomberg-reported memo. No additional public statement from the firm’s leadership has detailed how automation savings are being measured or which divisions are most affected.
That distinction matters. Many of the cuts still reflect traditional performance management: identifying the lowest-rated employees and making room for stronger hires or internal promotions. But the explicit mention of AI in a workforce planning memo marks a shift in tone. When a bank starts writing automation into the same documents that govern headcount, employees notice.
Goldman has not publicly specified which types of roles face the most pressure from the new approach. The firm’s recent earnings reports show continued strength in investment banking advisory and trading revenue, suggesting that client-facing, revenue-generating positions are not the immediate focus. But beyond that, the internal communications offer limited detail.
What employees and managers are bracing for
Inside the firm, the mood has shifted. People familiar with sentiment among Goldman’s investment banking staff describe a persistent unease that differs from the old seasonal anxiety. Under the previous system, employees knew roughly when the annual cut would land and could prepare. The rolling model removes that predictability. There is no single review date to brace for, no defined safe period once the annual sweep is complete.
The pressure is not limited to junior analysts. Managing directors who oversee teams of 15 to 30 people now face the task of delivering rolling performance feedback that could lead to separations at any point, rather than consolidating difficult conversations into one review cycle. That ongoing documentation burden, several industry observers have noted, could itself become a source of attrition if managers find the process unsustainable.
Several critical details remain unresolved. Goldman has not publicly disclosed the exact criteria managers will use to flag employees for rolling cuts, or how consistently those standards will be applied across divisions as different as investment banking, asset management, and the firm’s scaled-back consumer finance unit, which already shed significant headcount during the retreat from its Marcus consumer banking initiative.
The historical 3% to 5% target range offers a rough benchmark, but it is unclear whether that band still applies. Total separations over a full year could land in the same range or shift depending on deal flow, market conditions, and the pace of automation deployment.
There is also an open question about how rolling cuts will interact with Goldman’s bonus-setting calendar. If separations are increasingly decoupled from year-end reviews, employees may find themselves with fewer predictable moments to gauge their standing, making it harder to plan internal moves or negotiate departures on favorable terms.
A pattern Goldman is now pushing further than its peers
Goldman is not the only major bank rethinking how it manages headcount. Morgan Stanley and Citigroup have both moved toward more frequent performance assessments in recent years, according to people briefed on those firms’ internal processes. JPMorgan Chase CEO Jamie Dimon has spoken publicly about using technology to reduce staffing in specific functions. The common thread is a desire for flexibility: banks want to resize teams quickly as revenue conditions change, without waiting for a single annual window.
The approach also echoes a pattern already established in the technology sector, where companies such as Meta, Google, and Amazon shifted from periodic large-scale layoffs to smaller, continuous performance-based reductions beginning in 2023 and 2024. Goldman’s adoption of a similar rolling model suggests the practice is migrating from Silicon Valley into traditional finance.
What sets Goldman apart on Wall Street is the speed of the transition and the directness of the AI link in its internal language. In less than 18 months, the firm went from pulling its annual cuts forward to telling employees that reductions would recur within the same year to formalizing a rolling process. That pace suggests leadership views the old model as fundamentally outdated, not merely poorly timed.
Year-round performance pressure becomes Goldman’s new operating reality
For Goldman’s workforce, the practical reality is straightforward: the days of enduring one anxious season and then exhaling for the rest of the year are gone. Performance pressure is now a year-round condition, and the firm has put that in writing.
Whether continuous culling sharpens Goldman’s competitive edge or simply accelerates burnout and turnover is a question the bank’s own managers are still working through. The first full cycle of the new system, playing out this spring and summer, will offer the earliest evidence of which outcome is taking shape.
