As Goldman Sachs shrinks, its elite inner circle will also be getting smaller.
The Wall Street firm is expected to name fewer than 100 new partners this fall, one of the smallest classes in recent years, according to people briefed on the matter but not authorized to speak on the record.
In an effort to reward its top consistent producers, Goldman spends months vetting potential partners every two years.
Those selected are typically rewarded lavishly and have an inside track to top jobs at the firm. In 2010, 110 new partners were named.
But this year Goldman will be more selective about the select. The firm has cut its head count over the last year by more than 8 percent, to 32,400 employees, to cope with reduced revenue amid difficult markets and new regulations.
Just last week Goldman laid offanother 50 employees — some of them highly paid managing directors.
The size of the partnership typically shrinks in concert with the size of the staff, which means that the new members may be as few as or even fewer than those in the class of 2008, when just 94 new partners were named during the height of the financial crisis.
A Goldman spokesman declined to comment on Wednesday.
Financial companies like Goldman have been cutting back for more than a year, eliminating jobs and getting out of certain businesses.
While its executives are still richly rewarded, the prospect of a smaller Wall Street elite has implications for the New York City economy and for the service and luxury businesses that depend on its largess.
Goldman’s decision to shrink the new class comes at a time of high turnover among current partners.
During the turmoil of the financial crisis, few partners left.
Over the last year, however, there has been a steady exodus, with dozens of partners announcing plans to leave.
That has been a big help to the firm’s continuing push to cut costs, as partners typically take home big pay packages.
Senior partners like its chief executive, Lloyd C. Blankfein, make a base salary of $2 million. (All told Mr.Blankfein took home $12 million in compensation for his workin 2011.)
Goldman sets aside roughly 40 percent of its revenue to pay employees overall.
There were 440 partners in February, the last time Goldman made a regulatory filing on the group with securities regulators.
This is down from 483 at the beginning of 2011.
A number of additional partners have left the firm since February, and senior management expects a few dozen more partners to leave by year’s end, according to the people briefed on the matter.
But one of those people said that ideally the firm would like to have a total partner class size of 400 to 450 people.
In addition to naming fewer partners, the firm is expected to shrink the size of its class of managing directors, which is one rung below that of partner.
In 2011 the firm appointed 261 managing directors, who typically make a base salary of $500,000.
The selection process for new partners will heat up this summer, with current partners both nominating and vetting candidates.
Goldman will make final decisions on the size of the class and who is in this fall, with an announcement most likely coming in November.