Goldman Sachs has cut 2,600 people this year - more than at any time since 2008

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Until today, the word was that Goldman Sachs had cut 400 people so far this year. This is the running total of its dismissal notifications with New York State officials. Yes, there were always going to be a few hundred more layoffs as Goldman doesn't only operate in Manhattan and New Jersey, but not that many more. It's come as a surprise, therefore, that Goldman's 2016 headcount reductions are huge, so huge that they outweigh anything seen at the firm for the past eight years.

The chart below indicates the extent of the break with recent tradition. At the end of the first half of 2016, net headcount (the headcount figure after allowing for hirings and firings) at Goldman Sachs was down by 2,000. At the end of the first half of 2015, it was up by 900. The only time that first half cuts exceeded the current level was in 2008, in the thick of the financial crisis, when net headcount was hacked by nearly 4,800.

In fact, Goldman's net headcount figures for this year understate the extent of its redundancies. In today's investor call, CFO Harvey Schwartz said the firm's layoffs were offset by the addition of around 600 junior hires in June - suggesting that Goldman has actually laid off 2,600 people globally since December. Most of them, seemingly, were outside the U.S. Fixed income, and its related support functions, suffered most. So, apparently, did highly paid staff - although Goldman cut headcount by 5% in the first half, its spending on compensation fell by 28%, something which Schwartz attributed to the layoffs.

The impetus behind the redundancies is clear. During today's call, Schwartz made numerous references to the uncongenial world in which Goldman finds itself. "The first half of this year has not been the greatest environment," he said, the first quarter was "violent", the second quarter was suffused with "concerns about Brexit," it's a "low growth environment," there are "heavier headwinds" in fixed income currencies and commodities (FICC), and the pipeline is on a "downwards trajectory" in M&A.

Thanks to its headcount cuts, Goldman expects to cut costs by $700m per year going forward. In 2016, however, cuts are expected to fall by only half that as the firm allocates $350m to severance payments. 2,600 people may have lost their jobs at Goldman, but they're walking away with a parting gift of $134k each, on average.

Photo credit: The Goldman Sachs Building by LucEdouard is licensed under CC BY 2.0.b

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