July 17 - Goldman Sachs to cut some senior staff after reporting earnings that beat forecasts despite a 12% drop in net income. Sasha Salama reports.
A new round of cost-cutting at Goldman Sachs will mean executive salaries will get sliced and diced. The biggest U.S. investment bank wants to continue the measures that helped it deliver a huge upside earnings surprise. On its earnings call, Goldman's CFO David Viniar said the firm is targeting another 500-million dollars in annual cost cuts. That's above its previous goal of $1.4 billion. On the chopping block, Goldman's senior executives who earn higher pay. Viniar says Goldman may have a higher head count at the end of this year - comprised of more junior staff. In its second quarter, Goldman cut 100 jobs and cut some other expenses. Edward Deicke of JHS Capital Advisors in New York tells Reuters " I think a lot of the cost-cutting measures are starting to pay off to the bottom line. I can't imagine at this point that other banks are going to disappoint. I think you are going to see upside surprises." On the call, Goldman's CFO was cautious about the future saying Goldman is managing its risk profile conservatively in light of market uncertainty. He added that he sees no evidence that a solution to Europe's crisis will come anytime soon. The company also acknowledged it's ramping up its private banking business. But it didn't confirm a report in the Wall Street Journal that it's set a goal of $100 billion in loans, up from $12 billion in March. Sasha Salama, Reuters