Goldman cuts 10% of workforce

Goldman Sachs is slashing 10% of its global workforce as recent changes to market conditions put strains on its business practice.

This would mean cutting 3,256 staff from its 32,569 workforce, and there are expectations that the New York and London offices would be hardest hit.

Goldman and Morgan Stanley applied to become holding companies in September after Lehman Brothers went bankrupt and Merrill Lynch was bought by Bank of America, indicating there may be an end to the traditional broker-dealer business model.

In Goldman’s third quarter results, profits were down 71.1% year-on-year to $810 million from $2.806 billion. Despite this large reduction in performance, it is still higher than many investment banks that posted losses for the quarter.

Among the business areas that caused a weaker performance for Goldman over the quarter was credit. The bank reported losses of $275 million (including hedges) related to non-investment grade credit origination activities. Mortgages included net losses of approximately $500 million on residential mortgage loans and securities and approximately $325 million on commercial mortgage loans and securities.

See also: Goldman and Morgan become bank holding companies
CDS spread widen further amid recession fears