As you may have heard (or witnessed firsthand), a whole bunch of banks are planning on laying off staff in the next couple months, with estimates for carnage in New York alone in the thousands. Barclays has already made cuts (on several occasions), and, as previously mentioned, Morgan Stanley and Credit Suisse have similar ideas in mind, as does UBS. Most disturbingly? Goldman Sachs, which should be immune to this stuff, will be letting people go as well and what’s worse, there’s no sign or word from the bank that this is merely part of its yearly exercise in which they lop off the bottom, least Sachy members of the group. Also? We're going to say it in a whispery voice so as not to freak anyone out but: bonuses may be compromised.
“It’s a tense environment right now,” said Glenn Schorr, an analyst with the investment bank Nomura. Even Goldman Sachs, Wall Street’s most profitable firm, is retrenching. Senior executives at Goldman have concluded they need to cut 10 percent, or $1 billion, of noncompensation expenses over the next 12 months, according to a person close to the matter who was not authorized to speak on the record. The big pullback will cause Goldman employees, who have already been ordered to cut costs, to re-examine every aspect of their business. The firm, this person said, had not set final targets for layoffs, but Goldman was “certain” to shrink headcount in the coming months. Decisions on bonuses are still months away, but they are sure to come down as well if business does not pick up.