Wall St bankers hit by jobs cull and bonus cuts

GOLDMAN Sachs has begun slashing jobs while Credit Suisse is ready to halve its bonus pool ahead of what is expected to be a grim earnings season on Wall Street.

The Goldman cull started yesterday as bankers in New York, London and beyond braced for news on whether they will keep their jobs.

Up to 3,200 of the 49,500 workforce are set for the chop, mainly in the investment banking and trading divisions, as Goldman looks to rein in spending.

Credit Suisse is considering cutting its bonus pool for 2022 by half, capping a grim year in which it had to raise £3.2bn after a string of losses.

The moves come ahead of the key US earnings season, with JP Morgan, Bank of America, Citigroup and Wells Fargo set to report fourth quarter earnings tomorrow.

Goldman Sachs and Morgan Stanley will follow on Tuesday. All are forecast to report lower profits amid a slowdown battering investment banking.

Analysts fear a rise in loss provisions to prepare for soured loans as the US enters recession. Neil Wilson, at Markets.com, said: ‘Investors will be watching closely for news on bad loans. Net interest income is likely to be strong but can the growth be sustained?’

He added: ‘As for banker bonuses, don’t expect them to be driving around London in new Porsches.’ It is all a sharp reversal in fortunes for the world’s biggest investment banks, who enjoyed a boom in 2021 and early 2022, taking advantage of the mergers and acquisitions deals after lockdowns. That caused a fierce war for talent with Wall Street offering first year staff $110,000 (£91,000) to join them.

But the number of takeovers dropped as interest rates have risen and company valuations have plummeted.