Shares of Goldman Sachs (NYSE: GS) had traded up this morning after the open, but shares are now in negative territory. There have been reports originally out of Reuters that Goldman Sachs is apparently cutting up to about 5% of its workforce. The odd thing is that Goldman Sachs has been deemed as the one safe haven in the brokerage and investment banking stocks.
We just put in a call to the company and so far this is not being confirmed as of yet and we were told that this might not be entirely accurate. The company also noted it has been receiving many inquiries on this, so we’d expect a formal response from the company shortly. For whatever it is worth, this may be part of a broad and general performance review that the company conducts regularly. Goldman Sachs is one of the most prestigious investment banking firms to work for and it isn’t keen on keeping staff around that it feels is under-performing.
What is interesting is that Goldman Sachs has been one of the only yet-to-be immune companies during the last round of the financial sector malaise in the stock market. But maybe their miserable and dismal November 2007 was even worse and this may mean that its situation hasn’t improved that much. But until the company clarifies the report then any inference may just end up being speculation.
If Goldman Sachs is really joining in on the layoffs (i.e. not just review of under-performing personnel), then there are still probably some more shoes to drop in the investment banking sector. Goldman Sachs shares are trading down about 1% at $196.50 after trading as high as $202.00 today and the 52-week trading range is $157.38 to $250.70.
Jon C. Ogg
January 25, 2008
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