It is the leading underwriter of initial public offerings worldwide. It is also the latest of a string of investment banks to trim its ranks. It has drawn up contingency plans to take more drastic job cuts if the market slowdown worsens. Despite the U.S. markets' recent rally, business has not been good in the high-end investment banking business that Goldman thrives on. Mergers and acquisitions and IPOs provide the best margins.
Business has yet to return.
Morgan Stanley, Merrill Lynch, Charles Schwab and Salomon Smith Barney, part of Citigroup, have all trimmed their staff since the market hit the doldrums last year. Total initial public offerings for the industry are down by 67 percent this year. Goldman's IPO fees are down more than half. Many investment banks lay off workers who don't perform. Turnover on Wall Street can also be high if bankers' aren't satisfied with bonuses.