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Layoffs Watch '14: Goldman Sachs, Etc

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"Etc" being banks where "trading revenue [has] plunged," which seems reasonable.

Slammed by declining revenue, the trading businesses inside the biggest global investment banks are expected to suffer job losses that could run into the thousands by the end of the year, according to people at the firms and recruiters who specialize in financial-services positions. The culprit: a persistent gap between revenue and employment. For the 10 largest global investment banks, trading revenue for fixed-income, currencies and commodities, or FICC, units in the first quarter plunged 15.7% from the same period a year earlier, according to data from research consultancy Coalition. The number of FICC traders, researchers and salespeople, meanwhile, fell just 4.8% over that period...Cycles come and go on Wall Street, and firms routinely hire people when business turns up and eliminate jobs when it heads south. But bankers increasingly worry that the downturn in trading that started last year is part of a broader sea change. Tough new rules on risk and capital, along with a sharp slowdown in market volatility, have made trading less profitable for big banks in the past few years, and banks are coming to grips with the possibility that conditions will remain weak long into the future...

At Goldman Sachs, the FICC unit accounts for about 30% of its revenue. Goldman has historically been more dependent on fixed-income trading than any of the big U.S. banks. Analysts have cut their second-quarter earnings estimates for the firm by five cents a share, to $3.33, since May 28, the day President Gary Cohn said unusually slow markets had made for "difficult" conditions for Wall Street firms. The New York firm already has selectively pruned staff in FICC this year, and will continue to if conditions don't improve through the rest of the year, according to people familiar with the firm's plans.

Jobs Are on the Line as Banks' Revenue Slides [WSJ]


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