Goldman Looks to Cut 10 Percent of Workforce: Report
Even the firms that have largely managed to skirt the nation's mortgage mess are finding some headwinds in a credit crunch that in the past few days has only given slight signs of easing. Goldman Sachs Group Inc. (GS) is preparing to lay off 3,250, or 10 percent of its work force, according to a Thursday report in the Wall Street Journal. Mortgages aren't the reason for pain at Goldman; spreading financial malaise is affecting the firm's investment banking and trading businesses. Word of the cuts shows how fast the market has continued to worsen from even one month ago; in Sept., CFO David Viniar said the firm expected staffing to remain flat after reaching record levels, but made no mention of potential job cuts. For those on the Street, word of fresh cuts at Goldman likely means even further cuts at other firms harder-hit by mortgages and the credit crisis. And, indeed, cuts have been coming in steady waves for the better part of 6 months now. More than a few of HW's key sources have switched firms or left to work for boutique shops in the past three months, with one source still in her current role expressing surprise at her continued employment. "If you'd asked me last year if I thought I'd still be sitting here today, I'd have told you no," said the source, a managing director at an unnamed financial institution. "But I don't expect to be sitting here at the end of the year, either." Roughly 61,000 employees at Merrill Lynch & Co. (MER) are likely to lose their jobs as a takeover by Bank of America Corp. (BAC) looms, the Journal suggested. The cuts at Goldman are likely to be across the company, according to the report. Disclosure: The author held no relevant positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.