According to Bloomberg, The Goldman Sachs Group, Inc. GS has retrenched employees in the investment banking division in London, New York and Hong Kong in the wake of reduced deals and 60% slump in first-quarter profits. Notably, the positions include that of managing directors, executive directors and vice presidents in the mergers and debt and equity capital markets units.
According to the source, the latest job cuts add to the dismissal of 5% of the annual workforce to make way for new recruits. Also, the report mentions that the New York-based banking giant’s job cuts follow the layoff of over 5% of its fixed-income traders and salespersons this year.
Notably, in March, Goldman updated the job cut list filed with the New York State Department of Labor. According to the amended “warn notice”, the company disclosed the potential termination of 109 employees, up from 43 reported in February.
Also, the amended filing extended the time period of the concerned layoffs which are scheduled to take place between May 9 and Dec 31. While the filing does not reveal which operations or positions will be affected, it gives the reason for elimination as “economic.”
On the contrary, the investment-banking unit of Goldman top-ranked as merger advisor in 2015 and was the most profitable among the bank’s four operating segments. However, to date in 2016, completed mergers globally have inched down over 80%, while equity offerings have declined approximately 65%.
Goldman’s move does not come as a surprise as post crisis, investment banks have not been able to boost revenues amid stricter regulations, low rate environment and challenging market scenario. Several other banks that are eliminating employees include Bank of America Corporation BAC, Credit Suisse Group AG CS and Deutsche Bank AG DB.
Goldman carries a Zacks Rank # 3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment