Goldman Sachs Slashes Average Pay 45% to only $363,654, Cuts 2500 Jobs

Maybe we can help those poor guys by throwing another $ 10 billion of taxpayers’ money at them, so that the bonuses for next year are secured too.
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Dec. 16 (Bloomberg) — Goldman Sachs Group Inc. eliminated 2,500 jobs in the fourth quarter and slashed average pay per worker 45 percent to $363,654 as the firm posted the first quarterly loss since going public almost a decade ago.

Expenses for compensation and benefits fell 46 percent to $10.9 billion from a record $20.2 billion in 2007, the New York- based company said in a statement today. That provides an average $363,654 for each of the firm’s 30,067 employees, down from $661,490 for each of the 30,522 people employed last year.

Goldman Sachs Chief Executive Officer Lloyd Blankfein and six deputies agreed to forgo their year-end bonuses after the firm converted to a bank-holding company and accepted $10 billion from the government to help it survive a financial crisis that eliminated three smaller rivals. The firm’s bonus pool, estimated at 60 percent of total compensation, dropped to $6.56 billion or an average $218,193 per employee this year.

“We think the industry is in the process of repricing its labor pool,” Guy Moszkowski, an analyst at Merrill Lynch & Co. in New York, wrote in a Dec. 3 note to investors. “We think it’s reasonable to expect this given the very weak earnings and outlook for next year and the fact that the labor environment is inhospitable.”

Three-quarters of Americans in a Bloomberg/Los Angeles Times poll conducted this month said they don’t think banks such as Goldman Sachs that accepted taxpayer funds should pay any bonuses at all.

The cuts give Goldman Sachs the lowest full-year compensation expense since 2004. Writedowns on debt securities, losses on private-equity holdings and a decline in investment- banking fees cut 2008 revenue to $22.2 billion, the lowest since 2004.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Last Updated: December 16, 2008 09:00 EST
By Christine Harper

Source: Bloomberg

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