Goldman Sachs revealed it reduced 5% of its staff over the last three months, which saved the firm a significant $700 million, according to chief financial officer, Harvey Schwartz.
Schwartz explained the “headcount process” began in February this year and $700 million of cost savings was associated to the exercise.
An analyst on Goldman Sach’s earnings call questioned Schwartz on the issue, stating: “That’s a really big headcount reduction in just three months.”
The bank’s CFO reiterated that a hiring process had also taken place, and its senior management do not feel as though it has “sacrificed any optionality.”
He shed some light on the headcount process, explaining to the analyst: “In years, it varies. Sometimes those reviews yield small reductions, sometimes we actually add people. It varied by business.
Obviously for businesses that have hit heavier headwinds, like fixed income, they elected to go beyond the 5% in terms of their exercise… This is a broad exercise across the firm.”
Fixed income, currencies and commodities revenues over the last three months this year were 20% higher than the second quarter of 2015.
The bank said this was due to “significantly higher net revenues in currencies and credit products, as well as higher net revenues in interest rate products and commodities.”
Sales for Goldman Sachs’ equities trading were 12% lower than the second quarter of 2015, “due to significantly lower net revenues in both cash products and derivatives in Asia.”
Goldman Sachs is the latest to report a surge in fixed income trading, but a dip in equities revenues.