Goldman Sachs Group is preparing to hand out a slew of pink slips, The Post has learned, in the latest sign that the downturn on Wall Street is showing no signs of letting up any time soon.
Goldman officials are drawing up plans for a big round of job cuts within its investment banking division, sources close to the firm told The Post.
The senior management of Goldman’s investment banking group has told department heads to start assembling lists of candidates to be laid off as the firm seeks further cost-cutting measures to bring expenses in line with revenue levels, sources said.
Although Goldman has not made a final decision on how deep the cuts will be, executives at the firm say they might amount to as much as 15 percent to 20 percent of the department, or between 150 and 200 bankers.
The layoffs, which will take place across various industry and product groups and at all levels of Goldman’s rank and file, are expected to take place during the next few weeks.
The cuts will be focused heavily on the firm’s senior-level bankers, who can’t produce enough revenues in the current market environment to justify their eye-popping pay packages.
In good years, managing directors, the highest-ranking bankers behind senior management, typically earn at least $1 million in total pay. Some command pay packages of $5 million to $10 million or more.
A Goldman spokeswoman declined to comment on any specific plans for job cuts.
“It’s counterproductive to encourage speculation or to comment on rumors,” she said.
The expected layoffs at Goldman come amid a protracted slowdown on Wall Street that has virtually every investment bank feeling the pain.
Just last week, Morgan Stanley & Co., one of Goldman’s biggest rivals, reported a 13 percent profit drop for the third quarter, as earnings in the firm’s investment banking and brokerage businesses declined by more than a third.
Goldman Sachs is slated to release its earnings tomorrow.
With no clear sign that demand for merger advisory and underwriting services will pick up any time soon, firms have been forced to resize their operations.
Morgan Stanley fired about 200 staffers in its investment banking unit a few weeks ago; Dresdner Kleinwort Wasserstein last week slashed about 500 banking jobs.
And after announcing disappointing earnings last week, J.P. Morgan Chase said that it too would be making additional job cuts.
To be sure, Goldman has already taken measures to manage compensation costs. Last month, it quietly told some of its top-level investment bankers they shouldn’t count on getting any bonuses this year.
Observers said the move might save Goldman as much as $30 million to $40 million.
It also enables the firm to save junior-level jobs, and to hold on to some senior bankers until Wall Street turns around.