Lean, mean Goldman to cull 3,200 jobs

GOLDMAN Sachs Group Inc, the only firm among Wall Street's five biggest to remain profitable through the credit crisis, will shed about 3,200 workers, or 10 percent of its staff, as the revenue outlook worsens, industry sources said.

The cuts add to more than 130,000 jobs eliminated in the financial industry since mid-2007, eclipsing the cuts after the Internet bubble burst in 2001, according to Bloomberg News. Goldman had 32,569 employees at the end of August, up 3 percent from May and 9 percent for the year.

Banks worldwide are shelving deals and cutting jobs as the unprecedented turmoil in credit markets spreads and spurs concern the global economy may fall into a recession. Goldman, which converted to a bank holding company last month and is receiving US$10 billion from the United States Treasury, has dropped by almost 50 percent in New York trading this year.

"When a lean and mean firm starts trimming, they're cutting into muscle," said Shaun Springer, chief executive officer of Napier Scott Executive Search Ltd in London. "The fact that they are cutting 10 percent is quite indicative of the fact that there are still a lot of problems ahead."

The new job cuts signal a reversal in strategy at Goldman since September 16. At that time, Chief Financial Officer David Viniar told analysts he expected the number of Goldman employees to increase by a percentage "in the low single digits" this year, excluding the purchase of a mortgage servicing company.