More banking woes as Citigroup and Goldman Sachs reveal job losses

| June 23, 2008 | 0 Comments

More job losses in the financial industry have been revealed as Wall Street giants, Citigroup and Goldman Sachs, announce staff cuts.

Citigroup, which is America’s largest bank, is believed to be axing up to 6,500 investment banking jobs. It is understood that trading desks in New York, London and other cities will be eliminated.

Sources close to the bank say senior managing directors are not immune from the redundancies, however, those in mergers and acquisitions bankers are most likely to be affected as their ranks were not sharply reduced earlier this year.

The only divisions of the investment bank likely to be safe are certain businesses in emerging markets and its transactions services division, which is extremely profitable.

Just 2 months ago, Citigroup said that 9,000 jobs would go in addition to the 21,000 laid off in the last 12 months. The bank has a worldwide workforce of approximately 350,000.

Citigroup has lost £7.6 billion ($15 billion) through sub-prime and credit crunch write-offs since last summer and is expected to have made further big losses in the second quarter of this year.

Meanwhile Goldman Sachs, which has emerged from the credit crunch relatively unscathed, is also eliminating 10% of its workforce in the M&A and corporate fundraising divisions this year. Redundancies are already underway at the banking giant.

Last week, Goldman announced a better-than-expected second-quarter profit of $2.09 billion, down 11% compared with the same period last year.

The bank’s headcount has fallen by about 400 people between the first and second quarters of this year.

Other investment banks to reveal job cuts include Swiss investment bank, Credit Suisse, who plans to axe 75 jobs in in its investment bank and support services division in the UK.

Switzerland’s second largest bank said challenging market conditions and projected staffing levels needed to meet client requirements has meant a reduction in headcount.

UBS, which is Switzerland’s largest bank, has reduced its workforce by almost 7% after being hit by heavy losses. The bank’s write-downs have reached $37.4 billion so far. It is one of the biggest victims of the credit crunch.

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