Goldman to Cut 10% of Jobs as Downsizing Wave Grows

The Goldman Sachs Tower dominates the Jersey City, N.J. skyline.

Goldman Sachs Group Inc. is preparing to cut about 10% of its 32,500 employees, according to people familiar with the matter, a sign of deepening job losses on Wall Street.

The cuts, expected throughout the New York-based company, underscore how much even the mightiest securities firms have been shaken by the 16-month credit crisis. Despite avoiding the catastrophic mistakes that sank Bear Stearns Cos. and Lehman Brothers Holdings Inc., Goldman is suffering from the drought in investment banking and trading.

Goldman, which recently converted to a bank-holding company, has in recent months been less willing to put its capital on the line for both itself and its clients, which will result in lower profits going forward.

In September, with the company’s work force at a record high, Chief Financial Officer David Viniar indicated he expected the company’s head count to be flat or higher for the rest of the year. But the credit crisis has deepened since then, forcing Goldman to make the cuts.

The downsizing wave is likely to get worse on Wall Street in the next several months, from securities firms to hedge funds. Barclays PLC plans to cut at least 3,000 jobs from its payroll in the U.S., which includes former Lehman operations.

Of the 61,000 employees at Merrill Lynch & Co., thousands are likely to lose their jobs as part of the firm’s looming takeover by Bank of America Corp. Merrill already has eliminated 5% of the its jobs this year.

About 75 Merrill staffers were cut this week from its Asian fixed-income and equities trading desks, according to people familiar with the situation. Those cuts were part of a world-wide staff reduction that eliminated about 500 trading jobs, a person close to the situation said.

At Morgan Stanley, employment as of the end of August was down about 3% from a year earlier to 46,383.

Write to Susanne Craig at

OCTOBER 23, 2008

Source: The Wall Street Journal

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