Friday, January 25, 2008

Goldman Sachs May Cut 1,500 Employees as Part of Annual Review

(Bloomberg) -- Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, said it may fire as many as 5 percent of its employees, or 1,500 people, over the next few weeks to weed out underperformers.

``As we do every year, we are reviewing the performance of the bottom 5 percent of our people and some number of them will be leaving the firm,'' said Lucas van Praag, a spokesman for the New York-based company. ``In most years we ask a significant percentage of that 5 percent to leave''

Goldman earned a record $11.6 billion last year after skirting the subprime collapse that caused historic losses at competitors such as Morgan Stanley, Merrill Lynch & Co. and Bear Stearns Cos. Banks and brokers have eliminated more than 25,000 jobs in the past six months as they racked up $136 billion of writedowns and credit losses tied to mortgage securities.

``This is about performance, not layoffs,'' van Praag said of Goldman's job cuts.

The firm set aside more than $20 billion in compensation for its 30,522 employees last year, or an average of $661,490 per person, the most of any Wall Street firm.

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