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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
RD
-
Should you invest in UK equities?The FTSE 100 hit a record high this week, but UK equities remain unloved and undervalued compared to their global and US peers. Should you snap them up at a discount?
-
State pension errors: DWP urged to check for mistakes among divorced peopleFormer pensions minister Steve Webb says there are a high number of divorced women on low state pensions. Now MPs want the DWP to check if there were any errors in “potentially underpaying men and women who are divorced”.
