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HSBC Said to Cut Senior Investment-Banking Jobs to Lower Costs

Goldman target managing and executive directors at firm

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Updated on June 1, 2016 — 11:44 AM EDT

Goldman Cuts Dozens of Banking Jobs

    Reductions target managing and executive directors at firm
    Bankers cut in London, New York and Hong Kong last month

Goldman Sachs Group Inc. cut investment banking jobs in the last few weeks, joining securities firms that are adjusting to a slowdown in deal activity, according to people familiar with the matter.

The bank eliminated dozens of managing directors, executive directors and vice presidents across the mergers and debt and equity capital markets teams, the people said, asking not to be named as the details aren’t public. The cuts affected bankers in cities including London, New York and Hong Kong and are in addition to the bank’s annual 5 percent cull of employees deemed underperformers, the people said.

Goldman Sachs Chief Executive Officer Lloyd Blankfein is embarking on his biggest cost-cutting push in years as the bank tries to weather a slump in trading and dealmaking, people familiar with the matter told Bloomberg in April. The job reductions follow a similar move in the firm’s trading division this year, driven in part by a 60 percent drop in first-quarter profit.

A spokesman for Goldman Sachs declined to comment.

The investment-banking cuts represent a reversal from 2015 for a unit that was the top-ranked merger adviser during that near-record year and produced the most profit among Goldman Sachs’s four operating segments. Completed mergers worldwide have plunged more than 80 percent so far this year, while equity offerings have dropped about 65 percent.
Investor Pressure

Goldman Sachs President Gary Cohn said Tuesday that the same forces that helped fuel mergers and acquisitions in 2015, such as low interest rates and sluggish growth, remain in place today and that the outlook for the business remains bright.

Goldman Sachs’s cost-cutting hasn’t prevented pressure from investors. At the bank’s annual meeting in May, its compensation plan, including a pay package that made Blankfein the highest-paid chief executive officer of a Wall Street bank for his work last year, drew the most opposition since shareholders began voting on the matter in 2009.

HSBC Holdings Plc is also cutting senior investment-banking positions as part of the lender’s ongoing plan to reduce costs, a person with knowledge of the matter said Tuesday. First-quarter profit fell 15 percent at the unit.

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HSBC Said to Cut Senior Investment-Banking Jobs to Lower Costs

May 31, 2016 — 4:31 PM EDT

HSBC Holdings Plc is cutting senior investment-banking positions as part of the lender’s ongoing plan to reduce costs across the company, according to a person with knowledge of the matter.

The cuts reflect a gradual trimming of jobs, said the person, who asked not to be identified because the move hasn’t been announced publicly. Reuters earlier on Tuesday reported the reductions would affect dozens of employees.

A year ago, Chief Executive Officer Stuart Gulliver outlined a three-year plan to pare back HSBC’s global network by shutting money-losing businesses and eliminating as many as 25,000 jobs. Gulliver’s cost cuts helped the bank beat analysts’ estimates for first-quarter profit, when the CEO said he was confident of hitting expense targets by the end of 2017.

First-quarter profit fell 15 percent at the investment bank, which is run by Samir Assaf. In February, Assaf hired Matthew Westerman, the former chairman of investment banking in Europe at Goldman Sachs Group Inc., to be HSBC’s co-head of global banking.

HSBC said in February that it would fold its capital-financing arm into the investment bank, and some of the job cuts are a result of duplication as the businesses are combined, the person said.

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