Goldman Cuts More Than 5% Of Fixed Income Workers; BofA To Layoff 150 Bankers And Traders

For years, we noted that despite Goldman suffering progressively declining revenue...

 

... and occasional downward fluctuations in its bonus pool. one of its key "charms" for employees was that ever since the financial crisis, its total number of employees never declined. That is no longer the case.

As Bloomberg reports, Goldman plans to eliminate more than 5% of traders and salespeople in its fixed-income business, cutting deeper into those operations than an annual companywide cull that has already begun. Furthermore, according to a notice filed on the DOL's WARN website, Goldman announced that it would terminate 43 workers, with the layoffs set to occur between May 9, and July 1.

The discussions started earlier than usual this year, and workers will be informed in conversations throughout this month and into April. The reductions will affect less than 10 percent of the fixed-income workforce, which is quite a sizable chunk for a business that until recently used to be one of Goldman's top performing profit centers.

Bloomberg adds that Goldman Sachs made its latest decision after evaluating client activity in this year’s early months, a period in which some firms signaled further slowdowns. JPMorgan Chase & Co.’s investment bank said Feb. 23 that revenue from equity and fixed-income sales and trading has tumbled about 20 percent this year. Goldman Sachs hasn’t provided similar guidance.

The layoffs confirm that generating revenue in the increasingly more illiquid fixed income space has become increasingly problematic not only for Goldman but for other firms. Other Wall Street banks also have been eliminating jobs. When Morgan Stanley cut about 1,200 employees in the fourth quarter, it included about 25 percent of its fixed-income trading staff.

And just to confirm that 2016 is set to be another poor year for compensation, not to mention worker morale on Wall Street, moments ago Bloomberg also broke the news that Bank of America plans to dismiss approximately 150 trading and investment-banking employees next week. Those who are about to join the ranks of initial claims recipients will learn their fate on March 8.