Goldman Sachs to cut more jobs this week, report claims

published 26 February 2013

Goldman Sachs Group is likely to axe jobs this week as part of an annual cull, according to Reuters on Tuesday.

The multinational investment banking firm normally reduces its workforce by 5.0% each year around this time to weed out the underperformers.

The company has over the past two years culled jobs by 9.0%, or 3,300.

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In the next round, sources told the news agency Goldman's equity trading business faced the biggest cuts where volumes and earnings are weak.

Fixed-income trading at Goldman is expected to see cuts of less than 5.0% as it had better volumes this year, a source said.

Overall, cuts across the company will be roughly in line with the usual 5.0%.

However, one person familiar with the situation said it was not part of a larger cost-cutting plan.

"As market activity has picked up in certain areas, we remain focused on prudently managing expenses and allocating resources to ensure we are best able to meet our clients' needs and generate good returns for our shareholders," said Goldman spokesman David Wells, who declined to comment on layoffs.

The news comes after Goldman's new Chief Financial Officer, Harvey Schwartz, said redundancies would help banks to wield higher returns on equity for shareholders.

"I think the industry will migrate to higher returns because they will have to," Schwartz said last month.

Goldman's return-on-equity was 10.7% last year which was an improvement on 2011 but well below pre-financial crisis highs above 30%.

Shares were up 0.40% to $27.37 at 13:27 Tuesday.