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    Goldman Sachs to cut 10 percent of jobs amid global financial crisis

    HotNewsTurkey with wires
    23.10.2008 - 15:37 | Son Güncelleme:

    Goldman Sachs Group Inc. plans to slash 10 percent of its workforce of 32,500 employees, in the latest sign of U.S. economic woes resulting from the credit crisis, the Wall Street Journal said Thursday.

    The cuts were expected "throughout the New York-based company," the newspaper said citing people familiar with the matter.

     

    In September, tycoon Warren Buffett’s Berkshire Hathaway agreed to buy five billion dollars of stock in the Wall Street bank which, along with investment bank rival Morgan Stanley, has converted to a bank-holding company amid the worsening financial crisis.

     

    "The downsizing wave is likely to get worse on Wall Street in the next several months, from securities firms to hedge funds," the Journal said.

     

    Among the planned job cuts are Barclays PLC, which plans to eliminate at least 3,000 U.S. jobs, and thousands of jobs at Merrill Lynch & Co. due to the firms impending takeover by Bank of America Corp.

     

    Merrill has already cut five percent of its workforce this year, and some 75 workers were cut this week from its Asian fixed-income and equities trading desks as part of a global reduction of 500 trading jobs, the report said.

     

    The bank has so far suffered the least damage in its peer group in the global financial crisis and it remains the leading adviser to mergers and initial public offerings worldwide.

     

    But its transition from an investment bank to a traditional bank holding company means the Federal Reserve will use its new regulatory authority to limit the bank's risk taking and encourage longer-maturity funding.

     

    Analysts expect Goldman to shrink businesses in prime brokerage and securitization.

     

    In June, Goldman laid off hundreds of support staff and junior bankers due to slowing markets following a round of cuts in leveraged lending and mortgage securities jobs in April.

     

    The company had 32,569 employees worldwide at the end of August. Compensation and benefits accounted for 57 percent of its total operating expenses in the three months ended August, down from 67 percent in the second quarter and 73 percent a year ago.

     

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