Goldman Said to Extend Fixed-Income Job Cuts to 10% of Staff

Goldman Said to Extend Fixed-Income Job Cuts to 10% of Staff



May 5, 2016 — 2:39 PM PDT Updated on May 5, 2016 — 3:32 PM PDT



Goldman Sachs Begins New Round of Jobs Cuts

• Latest move builds on reductions that had affected 8% by April
  
• Firm is also said to dismiss staff in equities division
  

Goldman Sachs Group Inc. is cutting more jobs in its securities units, extending reductions in fixed-income operations this year to roughly 10 percent of workers there, according to people with knowledge of the situation.
The dismissals in New York and London this week build on cuts that already had targeted about 8 percent of fixed-income personnel through last month, people with knowledge of the matter said, asking not to be identified because the plans aren’t public. The push also affects the equities division, one person said.
Goldman Sachs Chief Executive Officer Lloyd Blankfein is undertaking the firm’s biggest cost-cutting push in years as the investment bank tries to weather a slump in trading and dealmaking, people familiar with the plan said last month. Managers, particularly focused on improving results in the securities division, have been looking this year at trimming as much as 10 percent of the company’s fixed-income operations -- going deeper than an annual 5 percent cull to make way for new hires, people have said.
The Wall Street Journal reported the recent escalation of fixed-income reductions earlier Thursday. Michael DuVally, a company spokesman, declined to comment on the expansion.

Tumbling Revenue

Goldman Sachs’s trading revenue tumbled 37 percent to $3.44 billion in this year’s first quarter from a year earlier, as market volatility and falling asset values drove clients to the sidelines. Revenue from trading bonds, currencies and commodities plunged 47 percent. The company’s stock is down 11 percent this year.
Still, Blankfein, 61, has resisted calls for large-scale cuts to fixed-income operations, a business that once fueled huge Wall Street profits. He’s looking to grab market share as rivals including Morgan Stanley scale back amid the industrywide slump.
In operations handling clients’ trades, “we continue to carefully scale our business relative to the environment, but have also chosen to remain targeted in our efforts,” Blankfein and President Gary Cohn wrote last month in an annual letter to shareholders. “It is important to remember that cycles do turn, even if the timing of such inflections may be difficult to predict.”
http://www.bloomberg.com/news/articles/2016-05-05/goldman-said-to-extend-fixed-income-cuts-to-10-of-staff-in-2016