October 23, 2008 / 8:32 AM / 11 years ago

Goldman Sachs to cut staff by 10 percent: source

LONDON (Reuters) - Goldman Sachs Group Inc plans to cut 10 percent of its total staff, or almost 3,300 jobs, a source familiar with the matter said on Thursday.

The flags of the U.S. and Singapore hang outside of 85 Broad Street where U.S. investment bank Goldman Sachs is headquartered in New York, September 30, 2008. REUTERS/Lucas Jackson

Goldman Sachs has suffered less than most of its peers from the global financial crisis and remains the leading adviser to mergers and initial public offerings worldwide.

But its transition from an investment bank to a traditional bank holding company means the Federal Reserve will use its new regulatory authority to limit the bank’s risk taking and encourage longer-maturity funding.

Analysts expect the New York-based bank to shrink businesses in prime brokerage and securitization.

Goldman Sachs declined to comment.

In June, Goldman laid off hundreds of support staff and junior bankers due to slowing markets following a round of cuts in leveraged lending and mortgage securities jobs in April.

The company had 32,569 employees worldwide at the end of August. Compensation and benefits accounted for 57 percent of its total operating expenses in the three months to August, down from 67 percent in the second quarter and 73 percent a year ago.

Goldman’s move comes as Wall Street firms saw the worst September in the capital markets in decades including the bankruptcy of Lehman Brothers, the bailout of AIG, the acquisition of Merrill Lynch & Co Inc by Bank of America Corp and the takeover of Wachovia by Citi.

Wall Street’s job force peaked at 200,300 in December 2000 and stood at about 181,000 workers in July 2008, according to the state Labor Department.

New York City Comptroller William Thompson estimates there could be 35,000 job losses in the securities industry.

London will suffer an even bigger hit. The Center for Economics and Business Research (CEBR) expects the credit crunch to cost 62,000 financial jobs in 2008 and 2009.

Editing by Quentin Bryar and Jason Neely

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