Goldman Sacked: Bank Slashes 10% Of Staff

Investment Firm Tosses 3,200 Employees Overboard To Weather Stormy Economic Times

(AP)  Goldman Sachs Group Inc. has begun notifying about 3,200 employees globally that they have lost their jobs, as the world's biggest investment bank slashes expenses to ride out the financial crisis, a person familiar with the situation said Wednesday.

The job cuts, which were first reported last month, are a reflection of the ongoing downturn in the credit and lending markets that triggered massive losses for banks around the world. Goldman Sachs had been considered the strongest investment bank on Wall Street, and earlier this year had expected its payrolls to expand.

Positions will be cut across Goldman's offices globally and among various business lines, and will bring the company's staffing to 2006 and 2007 levels, the person said. He spoke on condition of anonymity because the company hasn't publicly disclosed details of the plan.

According to CapitalIQ, Goldman has more than 37,000 employees across its operations.

There also have been reports that Goldman's army of bankers might see their bonuses cut in half this year. Difficulties at the firm demonstrate that even the industry's most powerful player is not immune to fallout from the unprecedented financial turmoil.

On Monday, Merrill Lynch analyst Guy Moszkowski predicted that Goldman would report a loss for the fourth quarter - its first since going public in 1999. The stock market's plunge has created a brutal atmosphere for some of Goldman's once high-flying businesses, such as private equity and proprietary trading.

During its fiscal third quarter, which ended Aug. 31, the company's profit fell 71 percent, but that performance was still better than many of its competitors, which have reported quarterly losses throughout much of the year.

But, September was considered one of the worst months during the credit crisis as banks essentially stopped lending money to each other for fear loans would not be repaid. Problems intensified when Lehman filed for bankruptcy and the government loaned insurer American International Group Inc. $85 billion to help it remain in business.

"The short-term outlook for the company is poor," said Richard X. Bove, an analyst with Ladenburg Thalmann. "I have had a 'Sell' recommendation on this stock most of the past few years. The reason is that the market did not seem to understand the risks in this company. Those risks are now being made clear."

Last month, as Merrill Lynch & Co. hastily sold itself to Bank of America Corp., Goldman and fellow independent investment bank Morgan Stanley received approval to become bank holding companies. Former rival Bear Stearns was snapped up at a steep discount by JPMorgan Chase & Co. in March.

Goldman and Morgan Stanley made the change to bank holding companies as investors worried the stand-alone investment bank model may no longer be viable. The new status allows Goldman to grow a large deposit base to help fund its operations, while providing permanent access to borrow money from the Federal Reserve. Before changing its status, Goldman only had temporary access to that lending option.

But it also opens Goldman up to increased regulatory scrutiny, which could force it to scale back some of its more leveraged and aggressive business units.

Goldman also struck a deal with billionaire investor Warren Buffett to sell preferred and common stock to Buffett's Berkshire Hathaway Inc. As part of the deal, Buffett planned to invest at least $5 billion in fresh capital to help Goldman and could double that investment to $10 billion. At the same time, Goldman issued common stock to raise an additional $5 billion through a public offering.

Shares of Goldman fell $7.57, or 7.8 percent, to close earlier at $87.43. A year ago, the stock traded at a 52-week high of $240

[nothappyatall]

the person said. He spoke on condition of anonymity because the company hasn''t publicly disclosed details of the plan"

Of course, yellow journalism and yellow-bellied sap suckers always say that, meanwhile the claim could be totally WRONG.

[krescera]

How many of these poor souls contributed to the campaign funds of Barack Obama?Are they being punished for that?

[antoniof123]

There also have been reports that Goldman''s army of bankers might see their bonuses cut in half this year. Difficulties at the firm demonstrate that even the industry''s most powerful player is not immune to fallout from the unprecedented financial turmoil.

How about this one they should be cut out not in half.

Greed brought on by deregulation. Well, greedy boys and girls your reign of terror is about to end. You will get your bail out because we have to save the nation but your days of unlimited excess are drawing to an end. Good I hope that the governments of the world tie a lease around your necks so tight you have to ask to go to the bathroom. Traitors all of them.

[ontheleft]

''You will get your bail out because we have to save the nation''
Posted by antoniof123 at 08:26 AM

No, they are getting the bail outs because it is the banks and big corporations which run this country.