The pace of job losses in the investment banking industry is feared to accelerate over the summer after Goldman Sachs cut staff at its investment banking division last week, the Financial Times reported Monday.
The Wall Street bank is now expected to cut up to 10% of staff in the division that handles mergers and acquisition advice and corporate fundraisings over the course of 2008, with a fresh round of trimming starting last week, the report said. Goldman, in common with the rest of the industry, has been gradually shedding staff this year, or sending bankers previously based in the US and Europe to the Middle East and Asia, where business remains buoyant.
Wall Street rival Citigroup is already in the midst of a 10% reduction to its 65,000 strong investment banking staff. People at the bank said about half of the layoffs had already been made, with further cuts likely in the coming weeks. However, job losses across the industry have been less severe than many had expected this year, and Goldman’s heightened pessimism about its need to retain its more experienced staff during the rest of 2008 could prove a pretext for other banks to wield the axe with greater force, said the newspaper.
Job losses are reportedly gathering pace in Europe, which bankers say is lagging behind the US in adapting to the economic slowdown. Last week, Credit Suisse confirmed a fresh round of 75 job cuts in investment banking and support services in Britain, a move which it said reflected market conditions. About 11,000 jobs are feared to be lost in London this year, and a further 8,200 in 2009, according to a report from the Center for Economics and Business Research. (people.com.cn)