Original story: As the economy trudges along, the number of new Goldman Sachs managing directors is expected to be slightly larger than last year's class, according to a source.
Goldman will name its new managing directors in a memorandum to be released around noon EST Wednesday, the source told CNBC's Mary Thompson.
This year's crop will be the last to be harvested in an annual selection process. Traditionally, Goldman selected managing directors every year and named a small slice of those to be partners every other year. In a memo earlier this year, Goldman said it would select managing directors every other year. This means that new directors and new partners will be named on alternate years.
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Goldman has about 2,000 managing directors, some 6.3 percent of its workforce.The number of managing directors named this year is expected to be in line with past years. If this pattern holds, it will mean that Goldman will end up naming far fewer managing directors in the future than it has in the past. So the result of the decision to go biennial is likely to be a decline in the number of managing directors named over a five-year period.
Goldman's promotion decisions can be looked at as a barometer of Wall Street. The firm says it promotes based on market conditions and quality of the talent pool. A large number of promotions can mean that Goldman expects a near-term pickup in money-making opportunities. A particularly small number indicates a contraction.
This year's number suggests that Goldman basically expects things to trudge along as they have in the recent past.
Wednesday's announcement follows a general trend that has emerged at Goldman over the last several years. It is one part belt-tightening, which is in vogue all over the banking sector as firms trim expenses by cutting compensation costs. It also is likely to have the effect of making Goldman's workforce younger, as the firm has lately been hiring many more summer interns and junior analysts, making it more likely that some vice presidents will leave after being passed over this year.
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While the majority of new managing directors will based in the U.S., a significant portion comes from Europe (about 25 percent, according to a source) and emerging markets (about 20 percent).
—By CNBC's John Carney. Follow him on Twitter @Carney