Goldman Sachs follows HSBC in job cuts: reports

Pedro Gonçalves
Goldman Sachs follows HSBC in job cuts: reports

Goldman Sachs is mulling a plan to trim its commodities trading business as the investment banking industry faces a new wave of cuts. HSBC is also reported to be axing jobs.

Goldman is discussing pulling back in physical trading of iron ore, platinum and other metals, the WSJ report said, adding the reductions in the business will be presented to the board later this month.

The commodities-trading arm was once a huge moneymaker and training ground for a generation of executives including former chief Lloyd Blankfein. However, after a months-long review showed the business was using too much capital for too little profit.

The move came after news that HSBC is making dozens of redundancies in its global banking and markets arm. It is understood that the redundancies are part of the lender's annual performance review of employees and will not fall primarily on London, although some jobs will go in the City.

Goldman Sachs's review comes in the wake of the ascension of new CEO David Solomon to the top of the bank's hierarchy. Solomon reportedly has been re-examining each of the bank's businesses in an effort to find areas where cuts can be made. 

Goldman traders had their worst year on record in 2017. While there was a slight rebound last year, few people believe that the commodities desk can regain the profitability it had a decade ago when it contributed as much as 15% of Goldman's pretax profits, according to the Journal. 

It is understood that Goldman does not have plans to exit commodities altogether or to withdraw from any specific business lines within the division.

A spokesman for the bank said that it had not reached any final conclusions related to its business reviews, which were continuing.