Goldman Sachs lays off 70 in N.Y., London

October 15, 1994|By Bloomberg Business News

NEW YORK -- Goldman, Sachs & Co. said yesterday that it laid off 70 employees in its fixed-income and J. Aron commodities operations, or about 5 percent of the employees in those units.

"Due to the prolonged, industry-wide turndown, some belt-tightening has been necessary," Goldman said in a two-paragraph news release. "Each business unit and office did its own reassessment and made small, selective staff reductions."

Goldman partners said last week that the firm planned to cut about 5 percent of its 9,200 employees. The 125-year-old firm, Wall Street's oldest and richest investment banking partnership, earned $2.3 billion last year before partners' taxes. Goldman is on track to earn $600 million to $700 million for fiscal 1994, which ends next month, a partner said.

Profits are dwindling at many Wall Street firms because the three-year bond market rally came to a halt this year. Trading profits dwindled and new bond sales disappeared.

Bonuses are expected to decline at least 35 percent from last year. More than 2,000 people on Wall Street have lost jobs this year, according to John Keefe, an independent analyst who follows the securities business. The cutbacks include employees Merrill Lynch & Co., Lehman Bros. Holdings Inc., CS First Boston, PaineWebber Group Inc. and Smith Barney Inc.

Goldman, in attempting to put a positive spin on the situation, said the dismissals will help the company grow in the future. "We are convinced that by taking the right steps now, even though they may be painful, we will do as well as possible while conditions are difficult and emerge even stronger when industry conditions improve," the firm said.

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