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Goldman Sachs asks around 2,000 staff to cut back on travel costs

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Following a disappointing first quarter, Goldman Sachs has reportedly cut 60 positions from its sales and trading team in the U.S. and U.K.

This pushes its total job cuts this year to over 400.

The cuts, which come on top of at least 353 others in New York this year, reportedly affect employees in fixed-income and equities.

For those who get to keep their jobs however, life isn’t getting easier.

The company has started to tighten up budget beginning with a more stringent control over travel expenses.

The bank has asked its 2,000 some employees at Goldman Sachs Asset Management (GSAM) to cut back on costs—including travel that doesn’t involve meeting a client or getting new business, the Financial Times reported.

CEO Lloyd Blankfein has repeatedly said Goldman is seeking to reduce expenses in the hopes of increasing returns as Wall Street as a whole has struggled amid a sales-and-trading slump.

The cost cutting move comes as the bank’s earnings have suffered due to low oil prices, weak trading volumes, and poor results at its asset management unit.

ALSO READ: Goldman Sachs’ list of what NOT to say in an email

According to data from Morningstar, GSAM’s flagship bond fund is languishing in the bottom one-fifth of its class on a one- and three-year view of its performance, and investors have pulled money for 15 consecutive months from GSAM’s US mutual funds.

The division’s flagship bond fund, the strategic income fund, is down 2.7% over the past 12 months, while the bond market as a whole has risen 6%, all motives for the bank to cut back on spending.

Bankers might be upset about getting fewer company-sponsored hotel stays, flights, lunches and entertainment in coming months but the worse is yet to come.

Bloomberg reported earlier the bank has tried to cut cost by deferring projects, choosing not to fill open positions and spending less on printing pitch books or brochures.

Like most banks on Wall Street, Goldman has also adjusted the workforce, relying more on junior bankers, moving support staff to cheaper locations and investing in technology to improve productivity.

The bank has already moved about 25% of its jobs to lower cost cities including Bengaluru, Salt Lake City, Dallas, and Singapore.

A Goldman spokesman told the Financial Times: “Prudent cost management is important but we remain committed to serving our clients through active management and we believe we can grow the business over time by focusing on long-term performance, just as we have done in other areas.”

Image: 123RF

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