eFC Briefing: Yes, Goldman Too

Goldman Sachs, Fidelity reportedly plan job cuts. Janus Capital eliminates 100 jobs, or 9 percent of its workforce. Commercial lenders' compensation under pressure.

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If anyone doubted a fresh round of layoffs loomed, this should put their doubts to rest: Goldman Sachs reportedly is about to delete some 3,200 positions, or 10 percent of its worldwide work force. As recently as September, Goldman CFO David Viniar said he expected the company's head count to be flat or higher for the rest of the year. "But the credit crisis has deepened since then, forcing Goldman to make the cuts," The Wall Street Journal says. The Journal also says that Merrill Lynch eliminated about 500 trading jobs around the world last week, after Chief Executive John Thain said the firm's integration into Bank of America will result in "thousands" of job cuts.

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One of the buy side's largest and most visible players, mutual fund titan Fidelity Investments, plans to lay off up to 4,000 employees, according to a recent report. Citing unnamed sources, the mutual fund trade publication Ignites.com says Fidelity will eliminate 1,500 mostly back-office jobs by year-end, followed by another 2,500 early in 2009. Fidelity is under pressure to reduce expenses because plunging U.S. and world equity markets combined with customer withdrawals are shrinking assets under management.

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A Federal Reserve Bank of New York employment outlook concludes the financial industry in the area faces either a large and prolonged loss of jobs, a 25 percent-plus decline in aggregate compensation, or both. The seven-page report likens the present securities industry downturn to episodes that followed the 1987 stock-market crash and the bursting tech-stock bubble in 2000. In those instances, Wall Street employment didn't start to recover until at least three years after it had peaked.

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While the state of commercial lending varies between regions and sectors, the consolidation of large banks and a decline in loan opportunities is pressuring overall compensation in the field, recruiters say. "Across the country there are fewer large institutions, so there are fewer new opportunities, especially in the near-term," says Gregg Carlson, president of Carlson Search Group, in West Des Moines, Iowa. This year's compensation situation looks particularly bleak. No one is expecting much of a bonus, and even base salaries may shrink in some cases.

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Janus Capital Group, the publicly traded mutual fund firm, announced job cuts as the stock market's swoon shrinks assets under management. Within its third-quarter earnings release, Janus said it plans to cut its workforce by about 9 percent. The company had 1,213 full-time employees at the end of 2007. The cuts are broad-based but don't include any portfolio managers or investment analysts, a Janus spokesman told Financial News.

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While speakers at the 14th annual Women on Wall Street conference explored environmental sustainability and its links to the financial world, many of the 3,000 in attendance were more concerned about the job climate than the physical climate. Several Wall Street women at the conference told eFinancialCareers News they are investing significant time in networking and updating their resumes. Even those who felt secure in their current jobs said they are nevertheless taking precautions such as frequenting job Web sites and networking with people outside the finance industry.