The majority of the most recent layoffs at European investment bank Goldman Sachs have affected its equity capital markets and leveraged finance teams.
The cuts, which amounted to around 10% of both units in the region, were the most drastic of any team within its European investment banking unit. After a two-year hiatus during the pandemic, Goldman has resumed paying 1% to 5% annual compensation to its underperforming employees across the company.
According to people familiar with the situation, the US investment bank fired 12 bankers from both teams after it informed London workers of the layoffs earlier this week on September 20 and 21.
Globally, the bank employs 47,000 people. Around 800 of its 3,800 London-based staff are employed in the investment bank.
ECM and leveraged finance have been hit hard in London, although layoffs from Goldman have been modest compared to previous downturns. According to sources, two bankers have been fired from each of its financial institutions, media and technology groups, while other teams in the sector are fully protected.
According to the sources, ECM London has laid off two managing directors as well as up to six junior and mid-level employees.
Goldman’s ECM bankers have already collected $79.7 million in fees in 2022, up from $426.1 million at the same time in 2021.
According to data source DeLogic, ECM activity in Europe, the Middle East and Africa has shrunk 77% to $46.3 billion in capital raised so far this year, as investors and companies shun panicked markets. Goldman’s ECM bankers have already collected $79.7 million in fees in 2022, up from $426.1 million at the same time in 2021.
At the same time, rising interest rates and inflation have made transactions less likely, affecting banks’ ability to offer leveraged loans for commercial transactions. After extending a $15 billion loan to Wall Street banks, including Goldman Sachs, when financing terms were more favorable, software company Citrix is set to lose up to $600 million. The number of layoffs in the banking sector is once again increasing. Financial news indicates that HSBC has just let go of some dealmakers. 100 employees in London and New York have been made redundant by German bank Bernberg.
Summary of news:
- Goldman Sachs’ European ECM and Leveraged Finance teams have been hit hard by layoffs
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