Goldman Sachs To Engage Itself in Job Cutbacks | IBCA

Goldman Sachs To Engage Itself in Job Cutbacks

Goldman Sachs Group, a multinational Finance corporation is planning to cut around a quarter of the total investment banking recruitments in Asia except Japan, because of a deal-making drop in the region, according to a source.

According to a person with the matter’s knowledge, the company has plans to cut about 75% jobs in the decided regions by the end of this year. The job reduction is a result of the New-York based bank’s worst rankings in equity issuance- lowest since 2008, according to the data gathered by Bloomberg. While spokesperson of Goldman Sachs preferred not to comment, people associated with the company commented anonymously calling it a confidential matter.

Goldman’s ranking dropped to the 11th position from 2nd in 2015 and Asia’s ex-Japan equity offerings plummeted to 28% this year, according to the data. This decision came when authorities are scrutinizing the company for its active role in issuing a bond worth $6 billion for 1 Malaysia Development Bhd. Or simply 1MDB, the government fund of Malaysia at the center of numerous investigations focusing on suspected money laundering and corruption.

According to the data collected by Bloomberg, security firms of China, occupying 7 out of the total top 10 positions in suggesting Hong Kong public offerings, are challenging western banks like Morgan Stanley in Asia and Goldman Sachs. Postal Savings Bank located in China recently raised around $7 billion in an initial public offering of Hong Kong- the largest 1st time share sale of the year across the globe.

In order to trim costs, global investment banks worldwide reduced headcounts after facing declines in the firm’s profit. According to a source, a leading Swiss Global Financial company, UBS AG trimmed the ranks of senior management in the region, removing a Co-Head Position from an Asian Investment bank recently. The pretax profit of bank decreased to 48%, in the 2nd quarter- primarily due to the slowdown in Asia-Pacific equity business. Macquarie Group Ltd. And Nomura Holdings Inc. also reduced the jobs.

Goldman Sachs reportedly informed U.S Regulators about its plans to remove 15 positions before the year end in New York to reflect slower investment-banking and trading activities. Informing officials of New York about over 400 dismissals, the company cut jobs rates around 4 times in a year. The bank also extended its cutbacks in the fixed-income segment to around 10% of staff- almost double of what it culls in a year.

Reuter in its earlier reports stated about Goldman cutting almost 31% of jobs in investment-banking sector in ex-Japan Asia.