NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) notified roughly 3,200 employees this week that they have been laid off, part of previously reported plans to slash 10 percent of the firm’s global work force amid slumping markets, people familiar with the situation said Wednesday.
Goldman Sachs declined to comment.
Two weeks ago, Reuters reported Goldman planned to cut 10 percent of its staff, or almost 3,300 jobs, reflecting the weak economy and a cut back in proprietary trading. The cuts are an about-face for a company that as recently as September insisted its headcount would rise this year.
The latest cuts reduce headcount to the lowest since 2006 and hit every businesses and region.
The investment bank has managed to avoid the kind of losses from mortgages and corporate loans that have hobbled rivals, yet Goldman still has suffered from the steep decline in merger and underwriting activity, as well as plunging prices for stocks and other investments.
Goldman has quietly and slowly cut jobs all year. The bank laid off hundreds of M&A support staff and junior bankers in June due to slowing markets, following a round of leveraged lending and mortgage securities cuts in April.
Early this year, Goldman cut 1,500 people, or 5 percent of its staff, following 2007 performance reviews.
Goldman converted last month to a bank holding company supervised by the Federal Reserve and then raised $10 billion from Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research, Stock Buzz). These moves, together with a pending $10 billion investment by Treasury, will create a more stable but less profitable company.
Merrill Lynch analyst Guy Moszkowski last week predicted Goldman will report a fourth-quarter loss, its first since going public in 1999, as plunging markets slam private equity, proprietary trading and on its stake in Industrial and Commercial Bank of China.
By Joseph A. Giannone
(Editing by Bernard Orr)