GOLDMAN SACHS JBWere is expected this week to start trimming staff to rein in costs as equity market turnover and investment banking activity declines. The brokerage is expected to cut about 5 per cent of staff, or up to 65 jobs, from its 1300-strong workforce in Australia and New Zealand.
Brokerages and investment banks have begun cutting staff as the downturn bites. In a jobs purge in December, Macquarie Group axed more than 1000 staff, or 7.5 per cent of its workforce, and has continued to shed staff. Citigroup, UBS and Societe Generale also cut staff.
Goldman Sachs appointed Simon Rothery yesterday as the co-chief executive of the Australian firm. He replaces long-serving head Craig Drummond, who plans to retire in May.
Mr Rothery, formerly head of securities, joined Goldman Sachs in 1998 in Hong Kong and London, where he worked in the fixed income, currencies and commodities business.
Mr Rothery and co-chief Stephen Fitzgerald will be in Sydney.
Goldman Sachs JBWere was formed when the Wall Street investment bank and local broking firm JBWere merged in 2003. The firm is 45 per cent owned by Goldman Sachs and the balance by JBWere equity partners.
Moody's Investor Services downgraded the credit ratings of Citigroup's Australian operations to A2 from A1, mainly due to similar downgrades of the US parent. However, Moody's noted Citigroup's parent maintains strong support for the local business, which is still considered core to its global strategy.
Last week the US Government agreed to boost its stake in Citigroup to as much as 36 per cent to shore up the banking giant.
Moody's cut its credit ratings outlook on Australian banks this week. However the Big Four banks continue to have AA ratings.
