Goldman Sachs Group plans to cut about a quarter of its investment banking jobs in Asia, excluding Japan, because of a slump in deal-making in the region, according to a person with knowledge of the matter.
The New York-based bank plans to make the cutback of about 75 jobs in the region later this year, the person said, asking not to be identified because the matter is confidential. The job reduction comes as the bank faces its worst Asia ranking in equity issuance since 2008, according to data compiled by Bloomberg data. A Goldman Sachs spokesman said he was unable to comment.
Asia ex-Japan equity offerings have declined 29% this year, and Goldman’s ranking plummeted to 11th from second in 2015, its worst showing in about eight years, the data show. The company also has come under scrutiny by authorities for its role in underwriting $6bn of bond sales for 1MDB, the Malaysian government fund at the centre of several international investigations into suspected corruption and money laundering.
Chinese securities firms are mounting a challenge to western banks like Goldman Sachs and Morgan Stanley in Asia, with mainland companies occupying seven of the top 10 positions in advising on Hong Kong initial public offerings this year, data compiled by Bloomberg show. Postal Savings Bank of China Co raised $7.4bn in a Hong Kong initial public offering this week, the world’s biggest first-time share sale this year.
Global investment banks have reduced headcount to trim costs after reporting declines in profit this year. UBS AG trimmed senior management ranks in the region, removing an Asia investment banking co-head position in July. The bank’s pretax profit at its investment bank slumped 48% in the second quarter, which the bank partly blamed on a slowdown in its Asia-Pacific equities business. Nomura Holdings and Macquarie Group also cut jobs this year.
Goldman Sachs last month told US regulators it plans to eliminate 15 positions in New York before the end of this year to reflect slower trading and investment-banking activity. Goldman Sachs has cut jobs at least four times this year, with prior announcements informing New York officials of 408 dismissals. The bank has also extended cutbacks in its fixed- income division to roughly 10% of staff, double what it normally culls every year.
Reuters earlier reported Goldman is cutting almost 30% of the investment banking jobs in ex-Japan Asia.