GOLDMAN SACHS has begun a new round of staff cuts in its trading and investment banking divisions, three sources familiar with the matter said, a sign of continued cutbacks on Wall Street.
The job cuts follow 2,400 positions Goldman eliminated last year, and further reductions are possible as the company continues to reduce costs to raise profitability, the sources said.
The latest round of cuts is part of Goldman’s annual employee review process.
It is unclear how many people will be affected by the job eliminations, which began two weeks ago, because different divisions have received different targets, the sources said.
While management has formulated an overall plan for cost-cutting, all of the job cuts may not be completed for months, said a source familiar with the matter.
Recent staff cuts have been less drastic than the cuts Goldman performed in March 2011, when 5 per cent of its trading staff was let go, said the sources, who have either worked at the company or recruited for it, and spoke under condition of anonymity.
A Goldman spokesman declined to comment.
In late 2011, Goldman management targeted $1.4 billion in annual cost savings that would be achieved largely through staff and bonus cuts. When asked on a conference call in January whether the bank might have to do more such trimming this year to meet the goal, chief financial officer David Viniar said “there is a small amount left to go”.
The new job cuts are taking place in all of Goldman’s four main divisions, including sales and trading, investment banking, wealth management and investing and lending, according to one source familiar with the matter.
Many of the cuts are aimed at traders who can be replaced with new technology or back-office technology and operations staff who can be replaced with less expensive employees, the source said.
The bank has been pushing aggressively to replace staff in high-cost areas like New York and New Jersey with less costly workers in Salt Lake City.
Goldman has also been cutting some staff from divisions likely to be affected by new trading restrictions, such as in merchant banking. – (Reuters)
