Gold­man eyes cost cuts

The Pak Banker - - FRONT PAGE -

US bank­ing gi­ant Gold­man Sachs is weigh­ing cost cuts to deal with a slow­ing global econ­omy, its chief ex­ec­u­tive Lloyd Blank­fein said to­day. A per­son with knowl­edge of the sit­u­a­tion said Gold­man in­tends to slash at least five per- cent of its to­tal work­force this year. Speak­ing a day af­ter Gold­man shares plunged 4.6 per­cent amid ris­ing mar­ket wor­ries over credit qual­ity in banks, Blank­fein said that the bank can "ab­so­lutely do a lot more on the cost side if we have to." "We take a par­tic­u­lar and en­er­getic look at con­tin­ued cost cuts when rev­enues are stalled.... Ne­ces­sity is the mother of in­ven­tion," he said at a Credit Suisse fi­nan­cial ser­vices fo­rum in Mi­ami.

De­spite re­duc­ing staff among its traders and bankers, Gold­man has been forced to boost its work­force to deal with new reg­u­la­tory re­quire­ments. The num­ber of those em­ploy­ees rose 11 per­cent from 2012 to 36,800 by the end of 2015, the bank said.

Ac­cord­ing to the in­formed source, Gold­man's job axe will fall most sharply in its fixed-in­come prod­ucts, such as bonds, cur­ren­cies and com­modi­ties ac­tiv­i­ties, where 10 per­cent of the staff will lose their jobs.

Big banks have been un­der pres­sure to rein in bud­gets as the eco­nomic slow­down height­ens wor­ries about de­te­ri­o­rat­ing credit qual­ity, par­tic­u­larly as en­ergy com­pa­nies grap­ple with the sharp de­cline in oil and gas prices. Bank stocks have sunk in re­cent weeks, with Gold­man shares al­most 18 per­cent lower since the start of the year.

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