City blow as Goldmans cuts jobs

The world's best-known investment bank, Goldman Sachs, today admitted it will be shedding up to 2,000 employees worldwide, equivalent to 10 per cent of the workforce, following a strategic business review.

The firm prided itself on avoiding the dramatic jobs cull in the City and Wall Street last year. The decision not to embark on a widescale redundancy programme was based, however, on a pick-up in business early this year.

That recovery has failed to materialise and Goldmans is now being forced to cut costs by reducing staff numbers. The firm's problems were echoed elsewhere in the City as two other leading firms admitted they were about to lay off staff and rumours abounded of redundancies elsewhere.

Credit Suisse First Boston said it would be making staff cuts as it announced losses of almost £700 million last year.

Meanwhile, UBS Warburg said that about 40 graduate trainees will be "let go" this summer.

City headhunters say the mood is grim. "People have lost confidence. They are looking at their budgets and the sums are clearly not adding up," said Jonathan Baines at Whitehead Mann.

Last year, at least 20,000 jobs were lost in the City and 60,000 staff were culled from investment banks in London and New York.

The redundancies at Goldman Sachs are likely to be made in dribs and drabs over the coming months.

City & Business