GASPARINO: Layoffs Are Coming To Goldman Sachs
Executives at the biggest U.S. investment bank have now indicated to Wall Street analysts that they could make significant cuts in their fixed-income trading staff amid a sharp slowdown in business conditions.
The reporters write that details will come when the bank reports its second quarter financial results on July 15.
Layoffs in this department might not come as a surprise.
During a presentation in May, Goldman Sachs president Gary Cohn warned that trading volumes across the firm's divisions were plummeting.
"As we consider headwinds, volumes in a number of fixed income markets have been under significant pressure in 2014: FX volumes are down 45% versus 2013, mortgage-backed securities volumes are down over 20%, and corporate bond volumes are down almost 15%," he said.
"Naturally, we've been hearing a number of questions about the driver of these declines, including: macro factors, like fiscal or monetary policy, regulation, or the low-growth global economy," he continued. "We believe all play a role, but in our day-to-day business, the most significant factors are economic in nature."
Cohn also blamed the unusually low volatility in the markets, articulating that low volatility "discourages hedging and delays opportunistic investing."
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