Wall Street giant Goldman Sachs will cut 10 percent of its workforce, or about 3,260 jobs, a source familiar with the investment bank's plans told CNN Thursday.
The bank was one of eight leading banks in the United States that signed up for a government plan that would invest up to $250 billion in ailing financial institutions.
Sources familiar with the bailout plan said in mid-October that Goldman Sachs stood to receive $10 billion of that money to help stabilize the former stand-alone investment bank.
Goldman and Morgan Stanley got approval in September from the Federal Reserve to function as bank holding companies due to the financial crisis.
The move allows both institutions to create commercial banking operations that can take deposits.
Author: CNN (New York)
The author of Stag's Leap makes no claim to the IP contained in this post that is outside of any separate commentary that may be added. This article is posted here on Stag's Leap strictly for discussion and education purposes.
Stag's Leap Commentary:
It seems that no one is immune to this current situation. I know, shocking analysis isn't it? That being said, this is not unexpected. Despite their strong reputation and knack for surviving in the roughest of times, the markets are not favorable to investment banking performance - internal hedge funds are liquidating positions, the equity capital markets are closed; vc exits are limited; the debt capital markets are closed; mez debt is struggling; sales and trading is suffering; and M&A valuations are coming back down to earth. These performance issues necessitate action if Goldman wants to preserve their EPS and their share price. Fortunately (I suppose), these cuts do not come as a complete shock as the rest of the industry has already (and continues) to struggle, downsizing staff across the board. For example - Cowen & Co. laid off half of their SF first year analysts, just two months into their service. Hard times call for hard measures. And, on another fortunate note, at least these layoffs did not come any closer to the holiday season than this.