24/10/2008
GOLDMAN Sachs opened what is likely to be a bleak winter for bankers yesterday, slashing its global headcount of 32,000 by 10 per cent.
Up to 600 of Goldman’s 6000-strong London workforce could lose their jobs, as the bank wields the axe in a bid to scale back its activities amid the ongoing economic storm.
And the bank confirmed that it expects to cut around 3250 jobs globally, following an “annus horribilis” that saw one of Wall Street’s elite investment banks reinvent itself as a holding bank in order to stay afloat.
Goldman, led by chairman Lloyd C Blankfein, saw third quarter earnings eroded 70 per cent, reporting net income of $845m (£525m), down from $2.85bn for the same period in 2007.
A $5bn investment from Warren Buffett’s Berkshire Hathaway group has done little to revive the bank’s fortunes and, with bonuses due on 30 November, staff cutbacks will achieve significant cost cuts.
One veteran City headhunter said: “Executives at investment banks have all been told to cut staff before bonuses come out.
Goldman Sachs pays bonuses first, that is why they are the first to cut staff.” The job losses are understood to be part of a scaled-up version of annual cuts of 5 per cent made by the firm from the bottom of its talent pile.
ROB DAVIES
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