Thread: Goldman Sachs to Axe 2000 Jobs

Goldman Sachs axe falls on 2,000 jobs as banking downturn gathers force

By Simon Duke
Last updated at 10:10 PM on 18th March 2011
1 Comment

Goldman Sachs is axing nearly 2,000 jobs as the downturn in the investment banking industry gathers force.

The Wall Street giant is slashing its 35,700-strong global workforce by 5pc - with 1,785 highly paid staff set to lose their jobs.

The controversial firm, which paid £340m to settle a US fraud lawsuit last summer, suffered a 52pc profits plunge in the final three months of 2010 after the eurozone crisis rattled its clients.


Winners and losers: Warren Buffett has bagged a £310m profit on Goldman stock

News of the cull came as investment guru Warren Buffett bagged a £310m profit on £3.1bn of Goldman stock that he bought at the height of the financial panic in 2008. Goldman is buying back Buffett's shares for a 10pc premium to his purchase price.

Since the turn of the year, investors have been further rocked by the political crisis in the Middle east and Japan's nuclear catastrophe.

Analysts at Citigroup slashed their first-quarter profits forecasts for Goldman by nearly a third on expectations that revenues at its mainstay bond trading business will fall by a fifth.

A source familiar with Goldman said the looming job cuts were part of its annual cull of its worst performing staff and were not related to the deteriorating trading environment.

Nevertheless, the cull underlines the growing pressures on investment-banks as the threats to the global economy rise and regulators tighten the regulatory noose.

Lord Turner, the chairman of the UK's Financial Services Authority, this week predicted that the profitability of banks will decline in the future as lenders are forced to hold more cash on their balance sheets.

The European authorities have begun running health checks on a raft of banks operating in the region to assess whether they have enough capital to withstand further turmoil in the eurozone.

The european Union's bank regulator yesterday insisted that these new 'stress tests' will be harsher than last year's probe into the strength of its banks.

Last Summer's tests came in for heavy criticism after Ireland's three biggest banks passed with flying colours - only to require a humiliating bailout a few months later.

http://www.dailymail.co.uk/money/articl ... z1H3kVtnE6

There's always plenty of spots in federal prisons for them.