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Goldman Sachs Cutting Jobs Amid Market Weakness

Goldman Sachs Group, which for weeks denied it was cutting jobs, is slashing an undisclosed number of positions in mortgage and investment banking this month as weak markets erode its business.

Goldman Sachs
Goldman Sachs

These latest cuts are in addition to 1,500 employees, or 5 percent of Goldman's work force, who lost their jobs since December because they were deemed the company's poorest performers.

"Given market conditions, we have been looking at a number of areas of the firm where we believe we have too many people," Goldman spokesman Lucas van Praag said.

Van Praag, who declined to say how many jobs would be eliminated, said some employees were transferred but that most were let go.

Goldman also would not elaborate on specific businesses hit by the cuts.

At the same time, Goldman insisted it will hire employees as it seeks to boost headcount worldwide by the end of this year.

Goldman Chief Financial Officer David Viniar last month said he expected global headcount to rise by a percentage of low- to mid-single digits.

Based on the 31,874 people Goldman employed at the end of February, Goldman would need a net increase of 300 to 1,900 jobs.

Last year Goldman steered clear of the credit crunch, delivering record results.

Until now, it had deflected rumors that it would follow rival firms and slash jobs to cut costs.

But last month the firm suffered its steepest quarterly profit drop since going public in 1999, with earnings down by half.

Meanwhile the outlook for Wall Street banks this year is glum.

The pace of mergers and acquisitions announced so far this year is down 30 percent.

Goldman and its rivals also face lower demand for debt and stock underwriting, lower investment returns and the collapse of mortgage securities markets.