On its Platform Solutions business group, which includes Apple Card, Goldman Sachs has lost $3.03 billion in almost three years. Bloomberg claims that a sizable chunk of such losses was attributable to credit cards.
According to a regulatory filing made public by Goldman Sachs, Platform Solutions pretax losses totaled $3.03 billion from the beginning of 2020 through the end of September 2022.
According to sources with knowledge of the situation, Platform Solutions is on track to post a three-year loss of $4 billion when the most recent quarter’s figures are added, with Apple Card accounting for more than $1 billion of that loss.
For the first nine months of 2022, Sachs reported a pretax loss for its credit card division of more than $1.2 billion and a pretax loss of $1 billion for 2021. Bloomberg was informed by sources that the losses were “mostly tied to the Apple Card.” According to additional reports, most of the $2 billion losses expected for 2022 will be attributable to the Apple Card and the fintech instalment-lending site GreenSky.
According to 9to5Mac, the losses result from Goldman Sachs’ substantial investment in Apple Card, which is thought to have ranged from $1 to $3 billion. Platform Solutions’ break-even point is now 2025 instead of 2022, which was the bank’s original goal.
Adoptions by Apple Card
In addition to the losses, it has been claimed that Goldman Sachs is getting ready to fire 3,200 employees, most of whom will be from its banking and trading divisions. Goldman Sachs, a multinational provider of financial services, has begun to lay off employees in India.
Approximately 6.5 per cent of Goldman Sachs’ workforce, or more than 3,200 workers, are anticipated to lose their jobs. A number of affected employees have posted about the same on the social networking sites LinkedIn and Twitter. Here are a few LinkedIn posts by tech professionals affected by the layoffs at Goldman Sachs.
Several senior employees, including those at the vice-president level, were also affected by the layoffs, which were primarily undertaken to reduce expenses in the face of economic headwinds like high inflation, according to persons with knowledge of the situation.
Additionally, the Consumer Financial Protection Bureau (CFPB) is looking into Goldman Sachs’ card business at the same time as all of this. The CFPB is looking at “application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus,” according to a regulatory filing in August last year.
According to CNBC, such payment problems were brought on by the Apple Card’s quick adoption, which made it difficult for Goldman Sachs to handle associated customer care problems.