Goldman plans layoffs despite surging profits

Bank tells employees that head-count growth will be constrained through the end of the year

- Annamaria Andriotis

Goldman Sachs reported Tuesday it is now on pace for its best year ever in its main investment banking and markets division, though warned it would move to cut jobs in the coming weeks.

Wall Street’s engines are gaining steam thanks to a booming stock market and growing appetite in corporate boardrooms and executive suites to pursue mergers or public offerings. Still, Chief Executive David Solomon said Tuesday the bank was being cautious about the enthusiasm.

“Taking a step back, there is no question there’s a fair amount of investor exuberance at the moment,” Solomon said. “While I feel good about the forward outlook on balance, the market operates in cycles and disciplined risk management is imperative. We are especially vigilant in times like these.”

The Wall Street giant is now planning another round of layoffs, according to people familiar with the matter. Goldman partners were recently asked to identify low performers and more than 1,000 employees are expected to be affected, the people said.