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Goldman Sachs to lay off more than 5% of traders and salespeople

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Goldman Sachs Group has joined the long list of financial institutions that have announced job cuts this year.

Last Friday, the investment banking giant announced the decision to eliminate more than 5% of traders and salespeople in its fixed-income business.

The news came after reports in mid-January that the bank is weighing on cutting as much as 10% of the unit’s traders and salesmen which will affect up to 250.

The firm filed a list of 43 workers with the New York State Department of Labour last month, alerting authorities to the job cuts.

Bloomberg News, which first reported on Goldman’s filing, said the cutbacks would officially occur between May 9 and July 1.

Goldman Sachs is known to trim its workforce annually by getting rid of people it deems to be under performers, but it sometimes exceeds that amount.

The cuts also come at a time when investors are closely watching big banks for signs of a slowdown in business.

Large banks face growing fears, reflected in their falling stock prices, that low interest rates, rising defaults and other fallout of slowing economy could crimp profits this year — and potentially for years to come.

ALSO READ: HSBC will not be freezing salaries after all

Chief executive officer Lloyd Blankfein has stood by fixed-income operations to win more customers as rivals increasingly retrench and acknowledge that their revenue from that business isn’t bouncing back.

Still, he told investors last month that the firm has trimmed fixed-income headcount 10% since the start of 2012 as it balances a quest for market share with a focus on returns.

“We remain committed to our FICC (Fixed Income Clearing Corporation) business, but we’re also managing to the cycle,” Blankfein said last month, referring to fixed-income, currencies and commodities.

“We don’t regard this as a structural change. It might be structural aspects to the evolution of the FICC market in terms of some of the rules and the technologies and the platforms that are being used, but I don’t think it’s going out of business.”

In the fourth-quarter, Goldman said revenue from fixed income, currency and commodities client execution dropped 13%. For the year, Goldman reported revenue across its businesses of $33.8 billion, down 2% over the previous year.

Other Wall Street banks also have been eliminating jobs. When Morgan Stanley cut about 1,200 employees in the fourth quarter, it included about 25% of its fixed-income trading staff.

 

Image: Shutterstock

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