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Tuesday’s Headlines: Reports of Cutbacks at Goldman, Bank of America and RBS

Laid off employee

Goldman Sachs apparently can’t stop the bleeding. Three unnamed sources told Reuters that the bank has started a new round of cuts in its trading, wealth management, lending and investment banking units – layoffs that come at the heels of the 2,400 eliminated positions in 2011. Last year, 5 percent of the bank’s trading staff got pink slips. The sources said the new cuts are part of the annual process of axing employees who miss their targets or whose positions can be outsourced with technology or cheaper labor, according to an article, which said the cuts will take place over the next several months, and the exact figures are not yet known.

In late 2011, Goldman management targeted $1.4 billion in annual cost savings that would be achieved largely through staff and bonus cuts. When asked on a conference call in January whether the bank might have to do more such trimming this year to meet the goal, Chief Financial Officer David Viniar said “there is a small amount left to go.”… Bank management has been issuing aggressive revenue targets that have been difficult to meet, particularly with fewer traders, weak trading volumes and low morale.

The bank has been focusing on replacing workers in New York and New Jersey with less expensive labor in Salt Lake City.

 

Other News:

Goldman isn’t the only bank cutting back. Steven Milunovich and two other energy analysts lost their jobs at BofA – signs of more cuts to come. [Bloomberg]

And RBS is shutting units in South Korea, Indonesia, Korea and Singapore, eliminating 70 positions. [Reuters]

Morgan Stanley, UBS, BofA and Goldman are set to profit from UPS’s $6.8 billion purchase of TNT. [Bloomberg]

Goldman hired for Formula One IPO advice. [Businessweek]

Three Ocean Partners pitches clients on the promise to take just one account per industry. [NY Times]

TIG is shuttering its $210 million global emerging markets fund. [Reuters]

MBIA abandoned plans to pay bonuses to top executives for 2011. [WSJ]

India now allows foreign venture capitalists to buy securities from third parties. [WSJ]

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