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Goldman Sachs announces 1,700 job cuts

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After asking staff to cut back on travel costs, Goldman Sachs employed another way to cut budget- tell staff not to come in.  The Wall Street bank announced on Tuesday morning that it had slashed 1,700 positions in the past three months, despite reporting earnings that exceed the expectations of analysts.

In a conference call with analysts, Goldman CFO Harvey Schwartz called the quarter challenging, and said that the company had embarked on a cost-cutting plan that will save it US$700 million a year, the Fortune reports.

The layoffs mean that Goldman reduced its staff by 5% in the second quarter alone. It’s the third quarter in a row that the firm has eliminated positions.

According to Goldman’s second quarter results, the bank has set aside US$3.3 billion in compensation expenses during the second quarter, down 13% compared to US$3.8 billion a year ago.

Although the bank has been trying very hard to reduce head-count and compensation to achieve its cost cutting goals, those measures had yet to bring much impact.

The latest  74% year-on jump in revenue to US$1.82 billion reported in the second quarter was believed to be the result of the bank no longer having to pay the huge legal charge related to the bank’s fraudulent mortgage-backed securities, according to CNNMoney.

In other news, technology giant IBM who is going through a series of job cuts is showing some signs of rejuvenation after it reported better than expected earnings for the second quarter this week.

CEO Ginni Rometty announced IBM has added more than 30,000 new employees.  The gained  headcount was believed to be from the several acquisitions that the company had made during the year.

“In the second quarter we also continued to make meaningful progress in how IBMers work and contribute to this success. With Checkpoint, all IBMers are getting and giving faster and more frequent feedback. 130,000 IBMers have been trained in agile, 70,000 IBMers have chosen to work with Mac products, and more than 250,000 IBMers are using Box. Almost all IBMers participated in Cognitive Build, helping 20,000 colleagues collaborate on nearly 3,000 cognitive start-up projects. And we continue to invest in our people, with IBMers benefitting from 9 million hours of learning in the first half, and with more than 30,000 new IBMers joining the company.” she wrote in an internal email seen by Business Insider.

ALSO READ: Bank of America and HSBC to cut more jobs

Image: 123RF

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