Goldman Sachs, the region’s top investment bank, is said to be about to cut dealmaker jobs as pressure on profits increases.
As Goldman Sachs grapples with a regional slowdown and pressure to improve returns to shareholders, the bank could purge up to 30 percent of its investment bankers in Asia.
The cuts come amid a regional slowdown that has seen revenues from initial public offerings, mergers and acquisitions and debt offerings all fall by double-digits this year, according to Dealogic.
Across Asia-Pacific excluding Japan, Goldman’s ranking for investment-banking revenue has dropped to eighth so far this year, according to Dealogic. At the same point a year earlier the bank ranked fifth, and was first in 2014.
Bankers in Australasia and Japan are unaffected by Goldman’s headcount cuts, while departures in mainland China will be relatively few, the people said. The exact number of lay-offs is yet to be confirmed, but is likely to be at least one in every five among Goldman’s 300 bankers across the countries affected.
Hong Kong and Singapore Hit?
The move could mean that as many as 90 investment bankers across the region will be laid off over the next few months, according to people familiar with the bank’s plans, with the bulk of the cuts in Hong Kong and Singapore.
The cuts also mean that the New York-based bank is partially unstitching the Asian network it built up over the past 15 years, in the belief that having big teams of bankers on the ground in markets such as China and India would unlock opportunities.
However, profits have failed to flow as steadily as promised, with hubs such as Hong Kong now dominated by Chinese rivals. Mainland securities companies occupy seven of the top 10 positions in advising on Hong Kong initial public offerings this year.
The bank declined to comment on the lay-offs, which were first reported by Reuters.
