*

Goldman Sachs ( GS ) plans AI-driven productivity gains, memo

reveals

*

Firm expects net increase in headcount despite job cuts

*

AI initiative focuses on sales, client onboarding, and

critical

processes

*

Annual staffing cuts moved to second quarter, targeting

3%-5%

reduction

(Adds Bloomberg's reporting in paragraph 5, earnings background

in paragraph 6)

Oct 14 (Reuters) -

Goldman Sachs ( GS ) has informed employees of potential job

cuts and a hiring slowdown through the end of the year,

according to an internal memo seen by Reuters, as the Wall

Street giant aims to use artificial intelligence to enhance

productivity.

Calling the initiative "OneGS 3.0", the memo said some of

the priorities for its AI initiative are sales and client

on-boarding process, as well as other critical areas such as

lending processes, regulatory reporting, and vendor management.

"The rapidly accelerating advancements in AI can unlock

significant productivity gains for us, and we are confident we

can re-invest those gains to continue delivering world-class

solutions for our clients," said the memo, signed by CEO David

Solomon, President John Waldron and CFO Denis Coleman.

A spokesman for the firm said the company still expects to

finish the year with a net increase in overall headcount.

Bloomberg reported the memo on the job cuts earlier.

Goldman Sachs ( GS ) beat Wall Street expectations for

third-quarter profit on Tuesday, as its investment bankers

earned higher advisory fees and rallying markets boosted revenue

from managing client assets.

The Wall Street giant

made major leadership changes this year, introducing

co-heads across its major divisions and adding six new members

to its management committee. The firm also created a new

financing division.

The company also pulled forward annual staffing cuts to the

second quarter this year from September. The exercise typically

targets a headcount reduction of 3% to 5% based on performance.