Goldman Sachs’ European ECM and leveraged finance team hit hardest by layoffs

Goldman Sachs’ equity capital markets and leveraged finance teams bore the brunt of its latest cut-backs in its European investment bank.

The US investment bank has laid off 12 bankers across the two teams, according to people familiar with the matter, after Goldman informed London staff of the cuts earlier this week on 20 and 21 September.

These were the deepest cuts of any team within its European investment banking unit and amount to around 10% of the two units in the region. Goldman has restarted its annual cull of between 1% and 5% of its underperforming employees across the organization after a two-year hiatus during the pandemic.

The bank has 47,000 employees globally. Around 800 of its 3,800 staff in London work in investment banking.

Two managing directors within ECM in London have been made redundant, the people said, and up to six mid-ranking and junior staff.

While Goldman’s cuts are light compared to previous downturns, ECM and leveraged finance have been hit harder in London. Two bankers within each of its technology, telecoms and media unit and financial institutions group have been laid off, the people said, while some sector teams have remained completely unscathed.

READ HSBC trims UK investment bankers as layoffs pick up pace

Goldman’s ECM bankers (Emea) have hauled in fees of $79.7m so far in 2022 compared to $426.1m at the same point last year.

ECM activity in Europe, the Middle East and Africa slumped by 77% to $46.3bn in capital raised so far this year, according to data provider Dealogic, as investors and companies have stayed away from jittery markets. Goldman’s ECM bankers have hauled in fees of $79.7m so far in 2022 compared to $426.1m at the same point last year.

Meanwhile, the outlook for dealmaking has darkened as rising interest rates and inflation have hit banks’ ability to extend leveraged loans to finance deals. Wall Street banks including Goldman Sachs are set to lose around $600m from the financing of software group Citrix after extending a $15bn debt package when financing conditions were more favorable.

Layoffs across the banking sector are picking up pace again. HSBC trimmed some dealmakers in recent weeks, Financial News reported, while German bank Berenberg has cut 100 people across London and New York.

To contact the author of this story with feedback or news, email Paul Clarke


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