Goldman Sachs Loses Money for a Change

October 21 00:00 2011

New York, Oct 20, 2011 (RainbowNewsLine.com) – Stellar investment bank and Wall Street giant, Goldman Sachs (NYSE: GS), has made public, its second quarterly loss in its 12 year history, on Wall Street. Goldman Sachs reported this loss as a result of the ensuing European crisis which has hit the company’s trading and underwriting revenues.

The Goldman Sachs stock has taken a minor hit suggesting that the market still has full faith in the bank’s ability to consistently generate profits in something as risky as trading equities and derivatives. In fact, of late, the firm’s fortunes have been closely tied to its trading activities. The bad news is that trading activity may continue to take hits over the coming few months.

Earlier this month, CEO, Lloyd Blanfein was quick to announce cost cutting plans in anticipation of these losses. Goldman Sachs has announced that it is going to right size its employee strength. At the same time, it also announced that the mega bonus packages for which Goldman Sachs is famous worldwide, maybe on hold for some time.

These moves in anticipation of losses are glimpses of a culture which does not tolerate bad performance. Even before the results were out, the CEO had taken steps to ensure that the poor performance is not repeated.

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