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Goldman Sachs was among the first large investment banks to roll out job cuts. It culled between 1% and 3% of some 40,000 employees in September, having reintroduced its so-called reduction-in-force measures after a three-year hiatus during the Covid pandemic and a surge in deals in 2021. Others including Citigroup, Deutsche Bank and Barclays have followed suit.

READ Bank of America CEO says dealmaker fees down by up to 60% in fourth quarter

Solomon said that it will “take some time to realise the benefits” of its cost-cutting measures and hinted that further reductions could be necessary unless the market environment improves. “We will size the firm to reflect the opportunity set that we see in front of us,” he said.

Goldman has also been cutting back on compensation as deal activity this year has tumbled. The bank cut pay costs by 21% to $11.4bn in the first nine months of 2022 and is expected to make difficult choices with the bonus pool. Bloomberg reported that traders have been warned of “low double-digit percentage” bonus reductions this year and dealmakers are likely to see bigger declines. JPMorgan, Bank of America and Citigroup are all set to cut the bonus pool for bankers by up to 30% this year.

READ Goldman Sachs London banker pay slides 53% as deal fees fade

Solomon struck a bearish tone during his speech to the conference, saying that clients were “fatigued” by the ongoing challenges and remained cautious. The drought in capital markets activity, which has tumbled in 2022, shows little signs of bouncing back, he said.

“We were hopeful that we would see a more meaningful rebound in capital markets activity this quarter, but that hasn’t happened,” he said.

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To contact the author of this story with feedback or news, email Paul Clarke