Goldman Sachs cuts salaries and bonuses as profits fall by half

Goldman Sachs, the New York-based banking giant, saw its fourth-quarter profits fall 56 percent due to a collapse in revenue from trading and investment banking, Reuters reported, although the bank managed to confound gloomier analyst forecasts through lower taxes and cost-cutting.

Wall Street banks let go of tens of thousands of employees and cut back on bonuses in response to the business slowdown in 2011. Goldman Sachs, which set a record in 2007 for securities-firm pay, reduced its pay and bonus benefits in 2011 to $12.2 billion, down 21 percent from 2010, according to the BBC.

The bank, which saw its revenue slide 26 percent last year, said that it had cut total staff numbers by 7 percent last year, to 33,300 people.

Its biggest cost, the expense for salaries, bonuses and benefits, provided an average compensation per member of staff of around $366,360, Bloomberg reported, down from $430,700 for its 35,700 employees at the end of 2010, according to data released today in the company’s fourth-quarter earnings statement.

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Goldman Sachs’ results today reflected the weakest year for Wall Street since the financial crisis began, according to Reuters. Weak US growth and concerns over European sovereign debt saw banks’ clients hold off on risk-taking, pull back on acquisitions and delay bond and stock offerings.

In the whole of 2011, Goldman Sachs said it generated 47 percent less in profits than in 2010. About 50 partners left the company in the past year, according to Bloomberg, including trading co-heads Edward K. Eisler and David B. Heller.

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